Roving Periscope: FAANG faces existential crisis; now, Google to layoff over 10,000 people
Virendra Pandit
New Delhi: Loss-making Twitter is not the only technology-supported company facing rough weather sparked, among other reasons, by speeding up deglobalization, geopolitical turbulence, and worldwide economic recession. Most of the Big Tech companies—Facebook, Amazon, Apple, Netflix, and Google, known by the acronym FAANG—are also in the same sinking boat.
So, after Meta (Facebook) and Amazon, Alphabet, the parent company of the world’s largest search engine Google, on Tuesday, also announced to sack thousands of employees.
The total market capitalization of these giant companies is over USD 5 trillion.
The media reported on Tuesday that Alphabet is gearing up to terminate jobs of about 10,000 “poor performing” employees, or 6 percent of its workforce, in the Big Tech layoff season, kicked off by Meta (Facebook), Amazon, Twitter, Salesforce, and more amid the rough global conditions.
According to a report in The Information, Google plans to ease out 10,000 employees through a new ranking and performance improvement plan.
“A new performance management system could help managers push out thousands of underperforming employees starting early next year. Managers could also use the ratings to avoid paying them bonuses and stock grants,” the report said.
Under the new system, managers will categorize 6 percent of employees, or roughly 10,000 people, as low performers in terms of their impact on the business.
The new system also reduces the percentage of employees that can score a high rating.
Besides, the new performance system at Alphabet could use the ratings to avoid paying bonuses and stock grants.
Alphabet has a workforce of nearly 187,000 employees worldwide.
The median compensation for an Alphabet employee last year was around USD 295,884, according to a US Securities and Exchange Commission (SEC) filing.
Alphabet reported a net profit of USD 13.9 billion in the third quarter (Q3), down 27 percent from a year earlier. In comparison, revenue increased 6 percent to USD 69.1 billion, amid global slowdown and recession fears.
Google’s CEO Sundar Pichai aims to make Alphabet 20 percent more efficient, hinting at job cuts, the reports said.
Earlier, Alphabet was reported to be giving some workers 60 days to apply for a new role at the company if their jobs are set to be cut.
Pichai had said the company is still investing in long-term projects like quantum computing. But it’s essential “to be smart, to be frugal, to be scrappy, to be more efficient.”
“We’re committed to taking care of our employees. I think we’re just working through a tough moment macro-economically and I think it’s important we as a company align and work together,” Pichai said.
Earlier, addressing the gathering at the Code Conference in the US, he said the more the company tried to understand the macroeconomic conditions, the more it felt very uncertain about it.
“The macroeconomic performance is correlated to ad spending, consumer spends, and so on,” he told the audience.
Google has suspended hiring new employees and reportedly told some existing employees to “shape up or ship out” if they do not meet expectations.
