Google executives will eliminate a number of the technology firm’s notoriously opulent employee perks as part of attempts to reduce expenses and enhance profitability.
Google CEO Sundar Pichai notified the firm earlier this year that 12,000 roles will be terminated owing to prolonged macroeconomic uncertainty. A statement addressed by Google CFO Ruth Porat on Friday and obtained by Business Insider stated that the “difficult economic climate” and “great investment possibilities to propel technology ahead” will need adjustments to the company’s cost structure.
Back in October 2022, the firm announced third-quarter earnings and sales that fell short of analysts’ estimates, with profit down 27% year on year. Investors began to put pressure on Google to adopt a more aggressive spending-cutting plan. TCI Fund Management Ltd. asked Google to set a profit margin objective, enhance share buybacks, and limit losses in its portfolio, adding that Alphabet’s staff has grown 20% each year since 2017.
Workforce cutbacks will thus come before reorganizing technology operations to maximize resources, as well as adjustments to external procurement and contracting procedures. Although if such adjustments may not be “obvious” to most employees, Google’s “industry-leading perks, benefits and office amenities” will be reduced to save money.
According to Business Insider, the leaked memo stated:
“Cafes, MicroKitchens and other facilities will be tailored to better match how and when they are being used. Decisions will be based on data,” (…) “For example, where a cafe is seeing a significantly lower volume of use on certain days, we’ll close it on those days and put more focus instead on popular options that are close by. Similarly, we’ll consolidate MicroKitchens in buildings where we’re seeing more waste than value.”
The cost cuts will also apply to “certain fitness programs and shuttle timetables,” depending on how much they are used. Employee equipment and technology will also be evaluated, allowing Google to “save considerably” given the company’s scale.
Interest rate hikes, notably from the US Federal Reserve, have reduced demand for American technology shares. As a result of the bleak financial situation, many companies have been under greater pressure to undertake large workforce cuts.
Most major IT businesses began to decrease personnel as the increased consumer demand that resulted from the lockdown-induced recession began to slow. According to Crunchbase, more than 130,000 individuals have been laid off from technology organizations so far in 2023, despite companies eliminating about 93,000 positions last year.
Twitter CEO Elon Musk has also made changes to the social media company’s facilities and benefits. According to Heritage Global Partners, the business auctioned off La Marzocco espresso equipment and Rotisol rotisserie ovens, as well as commercial blenders and grinders, refrigerators, grills and griddles, fryers, braising pans, and pizza ovens. Google Jamboards, NEC projectors, phones and speakerphones, soft seats and furnishings, and hundreds of office chairs were among the electronic and furniture items up for sale.
Apple has “paused practically all hiring,” which might remain until the end of the year. According to Bloomberg, Apple is also reducing the frequency of bonuses for select staff.
Microsoft executives said in January that they will cut 10,000 positions, or around 5% of their staff, due to “macroeconomic circumstances and shifting client priorities.”
In addition, IBM announced 3,900 layoffs in January and forecasted lower yearly sales growth.
According to the corporation, pandemic-driven demand for corporate digitisation has given way to cautious investment by clients concerned about a recession.
Meta, Facebook’s parent company, recently announced 10,000 job cuts and that it will not fill 5,000 available positions.
In November, 2022 the social media behemoth let off 11,000 employees, accounting for around 13% of its staff at the time. Since Meta struggled with a sluggish advertising market and growing expenditures, this was one of the largest tech layoffs of 2022.
The company said that it will reduce the size of its recruitment staff and make more changes in its tech and business units in late April and late May.
Meta reported dropping profits and sales for the third straight quarter in February 2023.
Independent Writer. Marketing and communications strategist for politicians, artists, public figures & corporate brands for more than 10 years. Contact: @alejandrosbasso (Twitter)
Escritor independiente. Consultor en marketing y comunicaciones de políticos, artistas, figuras públicas y marcas por más de 10 años. Contacto: @alejandrosbasso (Twitter)