“These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” said CEO Sundar Pichai
Updated at 5:53 am EST
Google parent Alphabet (GOOGL) – Get Free Report unveiled plans to cut around 12,000 jobs from its global workforce Friday, media reports indicate, as the tech and media giant follows rivals in reducing headcount amid growing economic uncertainty.
Reuters reported that Google CEO Sundar Pichai has informed employees of the coming job cuts through a company-wide memo, with headcount losses expected in engineering and product teams as well as upper-level management.
Earlier this week, Microsoft (MSFT) – Get Free Report said it would slash around 5% of its global workforce, and take a $1.2 billion charge against its second quarter earnings, as it looks to ‘align costs’ with customer demand.
Microsoft said the cuts, which it expects to conclude in March, will result in the loss of around 10,000 jobs and a 12 cent hit to December quarter earnings, but added that it would continue to invest in areas such as AI and other advanced technologies.
Late last year, Amazon (AMZN) – Get Free Report announced plans to reduce its global workforce by around 18,000, which began earlier this week, while Meta Platforms (META) – Get Free Report revealed job cuts of around 11,000.
“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI,” Pichai said in the memo, adding he takes “full responsibility for the decisions” that lead to the reductions in what he described as a “different economic reality”.
“These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities,” he added.
Google shares were marked 1.74% higher in pre-market trading to indicate an opening bell price of $94.67 each, a move that would trim the stock’s six-month decline to around 17.2%.
Alphabet posted weaker-than-expected third quarter earnings in October, thanks in part to slowing ad sales growth, with CFO Ruth Porat warning that a tough comparable period will weigh on ad revenue growth rates over the final three months of the year, with added headwinds from the strength of the U.S. dollar.
Google said revenues from YouTube, its signature non-search platform, fell 2% to around $7.07 billion over the three months ending in September, a move Porat said reflected a “pullback in spend by some advertisers as we first noted last quarter”. Ad sales were up just 2.5% to $54.48 billion while overall revenues rose 6.1% — the slowest since 2013 — to $69.1 billion.
Google’s bottom line came in at $1.06 per share over the three months ending in September, compared to last year’s split-adjusted figure of $1.39 per share, a tally that missed Street forecasts by around $1.25 per share.