Pichai shared the news in an email to staff, which was also posted on the tech giant’s blog on Friday. He said his estimated 6% cuts in the workforce spanned the company’s product areas, functions, levels and geographies, and that the decision was based on “rigorous scrutiny.”
Alphabet is the latest big tech company to cut positions after expanding rapidly during the pandemic to meet surging demand for software and gadgets as people spend more time at home. However, that demand weakened with the return to face-to-face living, and rising interest rates made it more expensive to borrow money for new investments.
This week, Microsoft announced layoffs of 10,000 employees. In early January, Amazon announced it would cut 18,000 of her employees, while Facebook’s parent company Meta cut 11,000 of her. (Amazon founder Jeff Bezos owns the Washington Post.)
Recent data points to a resilient job market, but with massive layoffs also hitting the financial, media and housing sectors, some analysts see the tech industry shrinking as a recession. It’s called harbinger.
“As a company with nearly 25 years of history, we are going through a difficult economic cycle,” Pichai wrote. The company will use this opportunity to refocus its priorities, including investments in artificial intelligence, he added, adding, “We have a huge opportunity in front of us to use AI across our products, and we want to be bold and We are ready to tackle it responsibly.”
Once a major disruptor, Google’s search engine business may now be under threat from another potential disruptor. Artificial intelligence-powered chat bots such as ChatGPT. ChatGPT was released late last year, prompting Google management to declare it “Code Red.” report. Google is developing its own chat bot and has not yet made it public.
Alphabet shares were up more than 3% in pre-market trading on Friday morning.
