The tide has officially turned in Big Tech following the lockdown hiring spree: job cuts are coming thick and fast, with Google the latest in a long line of companies announcing redundancies in order to meet its goals.
The CEO of Google owner Alphabet, Sundar Pichai, told staff in an internal memo that slashing the roles was part of a wider decision to invest further into emerging technologies like AI: “We have ambitious goals and will be investing in our big priorities this year,” he wrote.
The memo, sent to staffers on Wednesday and seen by CNBC and confirmed by Fortune, is titled ‘2024 priorities and the year ahead’ and reads: “The reality is that to create the capacity for this investment, we have to make tough choices.” For some teams this will entail eliminating jobs, which Pichai describes as “removing layers to simplify execution and drive velocity.”
It wasn’t all doom and gloom from the Big Tech CEO though: Pichai said the cuts “will not touch every team” and added the layoffs will not be to the same scale as a similar action last year.
Google did not confirm how many jobs will be cut, or where, when approached by Fortune for comment.
Google staffers could be forgiven for feeling like they’ve been here before: in January 2023 Pichai issued a similar update announcing 12,000 roles would be cut. Pichai reasoned the action was a counter-balance to the hiring spree undertaken during Covid, writing: “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
In the memo sent out this week Pichai promised more detail on the reason for the cuts, namely laying out what the business’s goal is for AI. Google has pushed hard to catch up with rivals like Microsoft-backed OpenAI, launching its Bard bot in February last year following the explosion of interest in ChatGPT a matter of months before.
Google’s adventure into large language models (LLMs) hasn’t been seamless. A company event held early last year to showcase Bard went awry when the bot gave out inaccurate information—prompting shares in the company to nosedive and wiping $100 billion off its valuation in a single day.
Subsequent reports further damaged Google’s mission, including apparent concerns for staff about ethical lapses, a Google U.K. boss encouraging users to use the bot as a search engine as opposed to a source of information, leading to wider questions about the service’s usefulness.
Despite such hiccups, Google enjoyed a strong 2023 on the stock market, posting a 56% gain over the past 12 months as the so-called ‘Magnificent 7’ group enjoyed renewed interest on account of emerging technologies and a resilient consumer.
Sound familiar?
Pichai kicking off his year of ambition to make way for AI advancements might give analysts the feeling of being here before. In March last year Mark Zuckerberg announced ‘Meta’s year of efficiency,’ which involved axing 10,000 roles and closing down hiring for an additional 5,000 staffers.
Similarly to Pichai, Zuckerberg said the cuts were being made in order to “flatten our orgs” and cancel “lower priority projects.” Again, the Facebook founder’s motivation was clear and a blueprint of Pichai’s, adding: “Our single largest investment is in advancing AI and building it into every one of our products … This work is incredibly important and the stakes are high. The financial plan we’ve set out puts us in position to deliver it.”
The about-turn from mass hiring during COVID—in just 2020 and 2021 Microsoft, Alphabet, Salesforce and Meta, hired 126,170 people, a combined increase of 35%—wasn’t difficult to predict. Meta workers hired as late as 2022 said they had to “fight” for work, while other Big Tech employees told Fortune they were paid six figures to do nothing—some even used company time to learn how to scuba dive.
Both Meta and Google were name-dropped by Silicon Valley VC Keith Rabois, who said the companies had hired thousands of people to do “fake work” to hit hiring metrics out of “vanity.” The DoorDash investor added: “There’s nothing for these people to do—it’s all fake work. Now that’s being exposed, what do these people actually do, they go to meetings.”
Meta and Google aren’t the only companies forced to axe their headcounts—the likes of Amazon and Salesforce also laid off thousands of people in 2023, bringing the total for the sector to a reported 240,193.
