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Google employees are worried that they might be laid off next year as the firm has allegedly increased its target layoffs for the lowest performers, according to unverified posts on an employee board. According to posters, managers at one of the biggest technology companies in the world have tightened the criteria for letting go of employees even amidst productivity growth among Google engineers.
Google, like its tech peer Microsoft, has struggled to match the stock market performance of the top performers in 2024 due to regulatory concerns revolving around its search engine business. The posts follow Google parent Alphabet's third-quarter earnings call, in which CFO Anat Ashkenazi shared that she would like to reengineer the firm's cost base further.
Google Employees Worried About Layoffs In January On Internet Chat Board
Google parent Alphabet generates most of its revenue from its search engine and advertising businesses that hold a tight grip on the industry. Consequently, with the firm engaged in legal battles with the Justice Department, investors have been wary of investing in its shares. The stock's troubles have also been due to the early stage of AI investing being focused on hardware providers - or just NVIDIA.
While Alphabet's third-quarter earnings beat analyst estimates for revenue, earnings and sales from major business divisions, they also revealed $13.72 billion in traffic acquisition costs (TAC). These were higher than analyst estimates of $13.53 billion, with the figure coming at a time when advertising revenue grew by 10% annually and search revenue jumped by 12.3% year-over-year.
The subsequent post-earnings call was also the first time Alphabet's new CFO, Anat Ashkenazi, got an opportunity to outline her strategy during earnings. Ashkenazi, who joined Alphabet after spending more than two decades at pharmaceutical giant Eli Lilly, revealed that she planned to "build on" previous efforts to streamline "operations across the company through the use of AI."
Amidst this backdrop, a post on the online message board Team Blind claims that Google will start laying off employees in January. According to the poster, the firm has increased its "lower buckets" to 10% from an earlier 8%. These buckets are of low-performing employees who might be let go. The Google employee believes that since Google's output has increased to "an average of 500 code changes a year" finding these low performing employees is easier than before.
They add that simply being a low performer might not be an adequate reason for an employee to be laid off. Instead, the poster believes that other factors such as being on the wrong project or on management's radar for low-performance can also lead to someone being let go.
Their post made three days ago, was met with skepticism and additional facts by employees from Google and other firms. Another Google employee who claims to work in the firm's Cloud business claims that the target layoff percentage for Google Cloud is 6%. Employees of Amazon and Capital One claim that the percentage at their organizations ranges from 6% to 15%. Additionally, Google employees on a separate post were also worried about layoffs, but others also joked about non-verifiable information on the Internet.
Worried questions from employees at an all-hands meeting in November followed the Alphabet CFO's comments at the earnings call. As reported by CNBC, Google's vice president of recruiting, Brian Ong, confirmed that the firm was "hiring less than we did a couple of years ago." Google's layoffs in 2023 generated widespread fury after reports of long time employees being let go without warning.
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