{"id":10091,"date":"2023-01-29T08:55:00","date_gmt":"2023-01-29T00:55:00","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=10091"},"modified":"2023-01-29T08:55:46","modified_gmt":"2023-01-29T00:55:46","slug":"google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/","title":{"rendered":"Google Laid Off 12,000 Workers: Why Is One Of The Most Profitable Companies In The World Retrenching Its Staff?"},"content":{"rendered":"\n

Google recently laid off 12,000 workers or about 6% of its global workforce the exit, joining the string of number of tech giants to retrench their workers. However, unlike some of the newer tech unicorns which have yet to show profitability (such as SEA) or tech giants that are facing restructuring (such as Twitter), Google has resilient cash flows from its ad market dominance.<\/p>\n\n\n\n

In its last published earnings report for 3Q2022, Google reported $69.1 billion in revenue with a net income of $13.9 billion. While the 4Q2022 earnings report is expected to be released on 2 February 2023, analysts\u2019 revenue expectations range from above $72 billion to $78 billion.<\/p>\n\n\n\n

So, why is Google retrenching its staff when it is still making profits? We take a look at Google\u2019s memo to its employees regarding the layoff and its financials to find out.<\/p>\n\n\n\n

Read Also: <\/em><\/strong>The Twitter Retrenchment: Why Labour Unions Are Still Relevant Today<\/em><\/strong><\/a><\/p>\n\n\n\n

Staffing Needs Change With Different Economic Realities<\/strong><\/h3>\n\n\n\n

One key reason Sundar Pichai, CEO of Google, gave for the retrenchment is the fact that they had \u201chired for a different economic reality than the one we face today.\u201d<\/p>\n\n\n\n

Instead of an environment rich for tech giants to thrive as companies are forced to work remotely and adopt digital services, the current environment is now fraught with economic uncertainties with rising interests, soaring inflation and a plateau in digital adoption as companies return to physical offices or have already been onboarded to digital services.<\/p>\n\n\n\n

Google Has Increased Its Workforce By Almost 40% In Two Years<\/strong><\/h3>\n\n\n\n

Over the past two years, Google underwent a period of dramatic growth. From 135,301 employees at the end of 2020, Google grew to 156,500 employees by end of 2021 and 186,779 by 30 September 2022 (3Q2022). This is an increase of almost 40% in employee numbers in the span of almost two years.<\/p>\n\n\n\n

 <\/td>4Q2019<\/strong><\/td>4Q2020<\/strong><\/td>4Q2021<\/strong><\/td>3Q2022<\/strong><\/td><\/tr>
Revenue <\/strong>(in millions)<\/td>$46,075<\/td>$56,898<\/td>$75,325<\/td>$69,092<\/td><\/tr>
Net Income <\/strong>(in millions)<\/td>$10,671<\/td>$15,227<\/td>$20,642<\/td>$13,910<\/td><\/tr>
No. of employees<\/strong><\/td>118,899<\/td>135,301<\/td>156,500<\/td>186,779<\/td><\/tr><\/tbody><\/table>
Source: <\/em>Google\u2019s earnings reports<\/em><\/a><\/figcaption><\/figure>\n\n\n\n
 <\/td>2019<\/strong><\/td>2020<\/strong><\/td>2021<\/strong><\/td>2022<\/strong><\/td><\/tr>
Revenue <\/strong>(in millions)<\/td>$161,857<\/td>$182,527<\/td>$257,637<\/td>Unreleased<\/em><\/td><\/tr>
Net Income <\/strong>(in millions)<\/td>$34,231<\/td>$40,269<\/td>$76,033<\/td>Unreleased<\/em><\/td><\/tr>
No. of employees<\/strong><\/td>118,899<\/td>135,301<\/td>156,500<\/td>Unreleased<\/em><\/td><\/tr><\/tbody><\/table>
Source: <\/em>Google\u2019s earnings reports<\/em><\/a><\/figcaption><\/figure>\n\n\n\n

Based on the end-of-year results for 2020 and 2021, Google had revenue growth of 60% while its workforce grew by 30%. While the end-of-year result for 2022 is yet to be released, the 3Q2022 earning results showed slowing revenue while its workforce continued to grow.<\/p>\n\n\n\n

As mentioned in the memo (see the end of the article), Google had hired to \u201cmatch and fuel\u201d the explosive growth it saw in 2020 and 2021. However, the changing economic environment in 2022 made Google reconsider its hiring.<\/p>\n\n\n\n

Read Also: <\/em><\/strong>Retrenchment Should Be The Last Resort: 4 Options Companies Can Consider To Reduce Cost First<\/em><\/strong><\/a><\/p>\n\n\n\n

Google Will Still Have More Workers Compared To 2 Years Ago Even After Retrenchment<\/strong><\/h3>\n\n\n\n

Assuming Google\u2019s workforce remained at about 186,000 employees at the point of retrenchment (and not grown beyond that), the cut of 12,000 employees would mean a reduction to 174,000 employees. This is still higher than their workforce number at the end of 2020 which was about 135,000 employees.<\/p>\n\n\n\n

Suppose Google had indeed over-hired and overspent on manpower over the past two years. In that case, the shedding of 12,000 employees may actually still be insufficient to make a significant difference in the manpower expenses. Thus, it may not be surprising that in addition to the layoffs, Pichai<\/a> also announced that Google executives will be taking a significant cut in bonuses. These bonuses are tied to the company\u2019s performance which would reflect Google\u2019s slowing growth.<\/p>\n\n\n\n

Read Also: <\/em><\/strong>Here\u2019s How Companies Can Carry Out A Retrenchment Or Restructuring Exercise Responsibly<\/em><\/strong><\/a><\/p>\n\n\n\n

Google Is Providing A Golden Handshake<\/strong><\/h3>\n\n\n\n

While being retrenched is never easy, and the sudden swiftness of Google\u2019s layoffs didn\u2019t help, the 12,000 retrenched workers will be getting a golden handshake, especially when compared to other layoffs of other tech giants.<\/p>\n\n\n\n

Google\u2019s retrenched US workers would receive full salary during the full notification period (minimum 60 days), a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and acceleration of at least 16 weeks of GSU vesting, full payment of 2022 bonuses and remaining vacation time and 6 months of healthcare, job placement services, and immigration support for those affected.<\/p>\n\n\n\n

In comparison, retrenched Twitter workers reportedly<\/a> received less than the 3 months of severance promised to them. Google\u2019s severance package is also on par with (or even slightly better than) Meta\u2019s severance package<\/a> which includes 16 weeks of base pay plus two additional weeks for every year of service, with no cap, payment of remaining paid-time-off time, RSU vesting and six months of healthcare and 3 months of career support and support for immigration.<\/p>\n\n\n\n

Read Also: <\/em><\/strong>MOM Responsible Retrenchments \u2013 Guideline For Companies To Be Fair And Decent<\/em><\/strong><\/a><\/p>\n\n\n\n

Google Is Facing An Antitrust Lawsuit Filed By The US Department of Justice<\/strong><\/h3>\n\n\n\n

Another motivation for Google to “sharpen (its) focus, reengineeer (its) cost base and direct (its) talent and capital to (its) highest priorities” may be the pending scrutiny they would receive under the eyes of the US Department of Justice (DOJ). On 24 January 2023, the DOJ filed a civil antitrust suit against Google<\/a> for monopolising multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act.<\/p>\n\n\n\n

This isn\u2019t the first antitrust lawsuit faced by Google. In 2017, the European Commission fined Google<\/a> \u20ac2.42 billion for breaching EU antitrust rules by abusing its market dominance as a search engine to advantage another Google product, its comparison shopping service. However, as Gizmodo<\/a> puts it, Google may be screwed even if it wins the antitrust case. The antitrust investigation would hamstring Google in the race to outrun emerging competitors.<\/p>\n\n\n\n

Under such circumstances, Google would need to shed any excess deadweight (even if they are high performing employees but working in non-priority areas) to remain agile enough to tackle both an antitrust investigation and growing competition such as ChatGPT.<\/p>\n\n\n\n

\"\"
Credit: <\/em>CNBC<\/em><\/a><\/figcaption><\/figure><\/div>\n\n\n\n

Read Also: <\/em><\/strong>Can You Really Enforce The Non-Compete Clause in Singapore?<\/em><\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Even Google needs to sharpen its focus, reengineer its cost base and direct its talent and capital to the highest priorities\n","protected":false},"author":11,"featured_media":10094,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[364],"tags":[1635,868,1634,226,1246,917],"yoast_head":"\nGoogle Laid Off 12,000 Workers: Why Is One Of The Most Profitable Companies In The World Retrenching Its Staff? | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"Google recently laid off 12,000 workers despite bringing in almost $70 billion revenue and $14 billion profit in 3Q2022.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Google Laid Off 12,000 Workers: Why Is One Of The Most Profitable Companies In The World Retrenching Its Staff? | DollarsAndSense Business\" \/>\n<meta property=\"og:description\" content=\"Google recently laid off 12,000 workers despite bringing in almost $70 billion revenue and $14 billion profit in 3Q2022.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/\" \/>\n<meta property=\"og:site_name\" content=\"DollarsAndSense Business\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-29T00:55:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-29T00:55:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/dollarsandsense.sg\/business\/wp-content\/uploads\/2023\/01\/google-memo-cover.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"1333\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"5 minutes\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/dollarsandsense.sg\/business\/#website\",\"url\":\"https:\/\/dollarsandsense.sg\/business\/\",\"name\":\"DollarsAndSense Business\",\"description\":\"Helping Real People Build Real Businesses\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/dollarsandsense.sg\/business\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/dollarsandsense.sg\/business\/wp-content\/uploads\/2023\/01\/google-memo-cover.jpg\",\"contentUrl\":\"https:\/\/dollarsandsense.sg\/business\/wp-content\/uploads\/2023\/01\/google-memo-cover.jpg\",\"width\":2000,\"height\":1333},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/#webpage\",\"url\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/\",\"name\":\"Google Laid Off 12,000 Workers: Why Is One Of The Most Profitable Companies In The World Retrenching Its Staff? | DollarsAndSense Business\",\"isPartOf\":{\"@id\":\"https:\/\/dollarsandsense.sg\/business\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/#primaryimage\"},\"datePublished\":\"2023-01-29T00:55:00+00:00\",\"dateModified\":\"2023-01-29T00:55:46+00:00\",\"author\":{\"@id\":\"https:\/\/dollarsandsense.sg\/business\/#\/schema\/person\/0ee20d84a6762349fadfe161e387ffd7\"},\"description\":\"Google recently laid off 12,000 workers despite bringing in almost $70 billion revenue and $14 billion profit in 3Q2022.\",\"breadcrumb\":{\"@id\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"item\":{\"@type\":\"WebPage\",\"@id\":\"https:\/\/dollarsandsense.sg\/business\/\",\"url\":\"https:\/\/dollarsandsense.sg\/business\/\",\"name\":\"Home\"}},{\"@type\":\"ListItem\",\"position\":2,\"item\":{\"@id\":\"https:\/\/dollarsandsense.sg\/business\/google-laid-off-12000-workers-why-is-one-of-the-most-profitable-companies-in-the-world-retrenching-its-staff\/#webpage\"}}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/dollarsandsense.sg\/business\/#\/schema\/person\/0ee20d84a6762349fadfe161e387ffd7\",\"name\":\"Angela Koo\",\"url\":\"https:\/\/dollarsandsense.sg\/business\/author\/angelakoo\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/posts\/10091"}],"collection":[{"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/comments?post=10091"}],"version-history":[{"count":2,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/posts\/10091\/revisions"}],"predecessor-version":[{"id":10096,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/posts\/10091\/revisions\/10096"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/media\/10094"}],"wp:attachment":[{"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/media?parent=10091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/categories?post=10091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dollarsandsense.sg\/business\/wp-json\/wp\/v2\/tags?post=10091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}