Google’s Toronto office in 2018. COLE BURSTON/The Canadian Press
Alphabet Inc., parent of Google and YouTube, GOOG-Q is cutting about 12,000 jobs worldwide, including in Canada, as the company faces a slowdown in its rapid growth amid an economic downturn that has hit the tech sector with a series of blows.
The layoffs, which amount to 6 percent of the California-based internet giant’s global workforce, come on top of a brutal week of mass layoffs in the tech industry. Seattle-based Amazon.com Inc. AMZN-Q this week started its biggest round of work yet layoffs wiping out 18,000 workers. And Washington-based Microsoft Corp. MSFT-Q cuts 10,000 jobs as it cuts costs too.
It’s a continuation of layoffs that first swept the tech sector last year, when Meta Platforms Inc. META-Q, parent of Facebook and Instagram, announced about 11,000 job cuts and beleaguered social media network Twitter Inc. laid off more than half of its employees.
Canadian technology companies were also caught in this new wave of layoffs in early 2023. Lightspeed Commerce Inc. announced it would lay off 300 employees this week, while several other tech companies, including Hootsuite Inc., Thinkific Labs Inc. and Michele Romanow’s Clearco , also cut hundreds of jobs in the past two weeks alone.
Over the years, a handful of American tech companies have become one global giants, earning trillion dollar stock market capitalizations and dominating the markets. However, the sudden drop in 2022 dampened excitement in the space, partly due to macroeconomic challenges such as rising interest rates and surging inflation.
Layoffs aren’t the only problem plaguing Big Tech as the giants struggle to innovate
Tech executives are now openly acknowledging the sector’s woes as stock market valuations collapse, share prices endure volatility and a period of risk-taking gives way to a tightening of operations on all fronts.
On Friday, Sundar Pichai, Alphabet’s chief executive, apologized to “Googlers” and told them the layoffs were meant to “sharpen our focus, reengineer our cost base and direct our talent and capital to our highest priorities.” The biggest of those priorities is artificial intelligence, or AI, Mr. Pichai emphasized in his internal memo to staff.
“As an almost 25-year-old company, we’re bound to go through tough economic cycles,” he said. “I am confident in the tremendous opportunity ahead thanks to the strength of our mission, the value of our products and services, and our early investments in AI. To fully capture it, we will have to make hard choices.
The cuts will come as a disruption to “product areas, functions, levels and regions” across Alphabet and its subsidiaries. But Louisa Stanick, a Canadian spokeswoman for Google, did not say how many Canadian jobs would be affected by Friday’s layoffs.
Asked about benefits packages for Canadian-based employees, Ms. Staniec returned to a sentence in Mr. Pichai’s memo to staff: “In other countries, this process will take longer due to local laws and practices.”
A LinkedIn analysis suggests Google has at least 2,100 employees in Canada. In 2020, Google said its Canadian offices would be able to accommodate up to 5,000 employees by 2022.
The company began operations in this country in 2001, opening an office in Toronto with only one salesperson. In the two decades since, Google there is expanded its presence by hiring engineers, sales executives and AI researchers in offices in Waterloo, Toronto and Montreal.
Mr Pichai said US workers would be paid during a 60-day notice period before being offered the severance packages, which would include a minimum of 16 weeks of pay plus two weeks for each additional year at Google. These workers will also be offered health benefits, job placement services and immigration support.
A company town hall will be held Monday to answer questions from employees about the next stage for Google’s future, Mr. Pichai said.
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