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Google Boss Opens Up Cause of Layoffs of 12,000 Employees

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Alphabet and Google CEO Sundar Pichai has opened up after announcing the biggest layoffs in the company's history. In a town hall meeting attended by employees and executives, Pichai defended the layoff decision and answered a number of questions.

During the meeting, Pichai gave an explanation of how he and Google's executive team made the layoff decision that would affect 12,000 employees. Pichai said he also consulted with founders and shareholders Sergey Brin and Larry Page and members of the board.


Pichai revealed that 2021 was the biggest year in the company's history with revenue growing by up to 41%. To keep up with the growth, Google is hiring more employees and Pichai said he hopes the growth will be sustainable.



"In that context, we made a series of decisions that might be right if the trend continues," Pichai said at the town hall meeting, as quoted by CNBC who listened to the recording of the meeting, Tuesday (24/1/2023).


"You have to remember if that trend continues and we don't open up recruitment to keep pace, we will fall behind in many areas as a company." However, it turns out the economic situation is deteriorating and Google's leadership seems to feel they are overstaffed.



Google executives said the layoff decision was made by 750 senior leaders. The process also takes several weeks to determine who will be laid off.


Google Chief People Officer Fiona Cicconi said there are several criteria considered in determining the fate of employees including skills, time in a job where experience or relationships are relevant and important, as well as productivity indicators such as sales quotas and performance history.



In addition to making layoffs, Pichai indicated that Google would cut compensation and bonuses received by executives. He said all SVPs would receive a significant reduction in annual bonuses.


"The more senior you are, the more your compensation is related to performance. Your equity grant can be reduced if the performance is not good," says Pichai.

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