Alphabet announces layoffs of 12,000 employees

Alphabet (Google parent) announced on Friday that it is going to cut 12,000 of its workers, bringing the loss of jobs in the technology sector to 214,921 since 2022, according to data from the Layoffs.fyi portal.

Companies in the technology sector in the United States have been forced to cut jobs in recent months, after they expanded their workforces during the pandemic amid growth expectations that have moderated significantly today.

“Over the past two years we have seen periods of spectacular growth,” Alphabet CEO Sundar Pichai wrote in a letter to his employees. “To match and fuel that growth, we hired for a different economic reality than what we face today. I take full responsibility for the decisions that brought us here.”

After the news was released, Alphabet’s shares rallied 5.34% in Friday’s trading, closing at $98.16 per unit.

Earlier in the week, Microsoft announced it was cutting 10,000 employees, while two weeks ago software company Salesforce announced it was cutting 10% of its workforce.

About a quarter of the more than 200,000 job losses in the past year have been at four big tech companies: Amazon, Meta, Microsoft and now Alphabet.

So far, the biggest cut has been Amazon’s announced cut of 18,000 total employees. In November of last year, it announced a cut of 10,000 employees and in early January of this year it reported another 8,000 additional people.

The cuts announced Friday by Alphabet represent less than half of the 36,751 employees it had added since the third quarter of 2021. Its workforce has increased more than 50% since the start of the Covid-19 pandemic.

“From our perspective, US companies will remain active in job cuts amid concerns of a possible global recession,” Monex Casa de Bolsa analysts said in a note.

With Google’s announcement, there are already 48,000 layoffs announced so far in January 2023, making it the month with the most staff cuts in the last year.

Rule out layoffs in Mexico

Analysts disagreed on whether Mexico will see a wave of layoffs in large public companies as well as in the US technology sector.

Carlos González, director of Analysis at Monex, said that Mexican companies will hardly experience cuts like in the United States, since the US technology companies that are cutting jobs were “high growth” during the Covid-19 pandemic.

“Currently, (the technology sector) is facing a previous scenario of a much more marked slowdown,” the analyst said.

For his part, Carlos Hermosillo, an independent analyst, said that “it is possible” that there will be a wave of cuts among the companies listed on the Mexican Stock Exchange during 2023 due to the expectation that the Mexican economy will slow down due to a recession. in United States.

sebastian.diaz@eleconomista.mx