LOS ANGELES, CA – JUNE 09: Google CEO Sundar Pichai speaks on a panel at the Americas CEO Summit hosted by the US Chamber of Commerce on June 09, 2022 in Los Angeles, California. The CEO Summit entered its second day of events with the official signing of the “International Coalition to Connect Marine Protected Areas” and a speech by US President Joe Biden. (Photo by Anna Moneymaker/Getty Images)
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Google’s parent company, Alphabet, will slow the pace of hiring and investment through 2023, CEO Sundar Pichai said in an email to employees on Tuesday.
“Like all companies, we are not immune to economic headwinds,” Pichai wrote in the note, which was reviewed by CNBC. “We need to be more proactive, working with more urgency, sharper focus and more hunger than we have shown on sunnier days.”
He began by admitting that “the uncertain global economic outlook has been the most important”.
Alphabet’s shares are down 21% so far this year, falling along with the rest of the tech industry as investors pull back from the stocks that drove the last decade’s bull market. The company missed analysts’ estimates for the first quarter, and Chief Financial Officer Ruth Porath warned that another tough period could be ahead.
Growth in the first quarter slowed to 23% from a year earlier, down from 34% growth in the first three months of 2021 as the economy was reopening from the pandemic. Still, Pichai said in the letter that the company hired 10,000 employees in the second quarter.
“Due to the hiring progress made so far this year, we will slow the pace of hiring for the remainder of the year while maintaining our top capabilities,” he wrote. “For the balance of 2022 and 2023, the company will focus on hiring engineering, technical and other critical roles.”
A Google spokesperson declined to comment.
Google, which has invested heavily in research and development in the past, will also be more careful about where it spends its money during this period of economic uncertainty.
“In some cases, this means consolidating where investments overlap and streamlining processes,” Pichai wrote. In other cases, it will mean “halting development and redirecting resources to higher priority areas,” he said.
Pichai ended the note by telling employees that “shortage breeds clarity” and stressed that “I’m excited to rise to the occasion again.”
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