What Google layoffs say about the state of tech hiring


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Dive Brief:

  • Google plans to eliminate 12,000 roles after a “rigorous review” of its product areas and functions in an effort to align the company’s priorities, Google said Friday. Google and Alphabet CEO Sundar Pichai said he takes “full responsibility for the decisions that led” to cuts, which account for 6% of its workforce. 
  • The layoffs will impact employees across the company’s global workforce spanning product areas, functions, job levels and regions. In an email, Google declined to indicate whether the company would continue to hire or if it was implementing a hiring freeze.
  • “Over the past two years, we’ve seen periods of dramatic growth,” Pichai said in an internal email to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”

Dive Insight:

Google joins tech giants Amazon and Microsoft in a course-correction from pandemic-era hiring. In the first 20 days of the year, more than 150 tech companies laid off over 55,000 employees, according to Layoffs.fyi. Businesses have grappled with a slowing economy, more customer resistance and internal pressures to do more with less.

Despite layoffs, technologists are still in demand across industries. Nearly three-quarters of laid-off tech workers found jobs within three months, according to data by workforce intelligence company Revelio Labs in December.

“The data indicates there are many organizations using the lull in tech sector hiring as an opportunity to recruit previously difficult-to-hire tech talent with the aim of functionality, data efficiency, security and related,” Tim Herbert, chief research officer at CompTIA, said in an email.

For Google, similarly to Microsoft, the path forward focuses on AI.

“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. “To fully capture it, we’ll need to make tough choices.” 

Leaders enterprisewide have relied on technology to enhance operations, optimize costs and reduce friction, but emerging technology investments can bring their own set of challenges.

“Employer job posting trending confirms the growth in demand for AI-related skills, but still represent[s] a relatively small share of tech hiring activity,” Herbert said. “As is often the case with emerging technology, companies find it takes the orchestration of many moving parts to move from experimentation to full production.”

Layoffs at major tech companies can present an opportunity for CIOs to look inward, according to Herbert. This may entail revisiting systems, processes or tech roadmaps and ensuring they align with business priorities and long-term goals. 

But, if taken too far, a laser focus on eliminating unproductive activities can cause tech leaders to risk delaying necessary investments in modernization and innovation, according to Herbert.

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