Google spent ₹17,500 crore to lay off 12,000 employees

Google incurred $2.1 billion (around ₹17,500 crore) in severance and related expenses during its 2023 layoffs, which affected over 12,000 employees. In this month alone, the company has already spent $700 million on severance charges for additional layoffs, encompassing more than 1,000 roles. Alphabet, the parent company of Google, disclosed these figures in its fourth-quarter earnings release on Tuesday, The Verge reported.

In January 2023, Alphabet announced plans to cut 12,000 jobs, or 6 per cent, of its global workforce. This was the biggest layoff in the history of Google, but was "essential" for the company, chief executive Sundar Pichai had said earlier.

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Alphabate posts double-digit revenue growth in 4th quarter

Google's parent company reported a noteworthy return to double-digit revenue growth in the last quarter of the previous year, with a boost from video-sharing platform YouTube and its cloud computing unit.

The results, announced on Tuesday, marked Alphabet's third consecutive quarter of increasing revenue growth, primarily driven by Google's dominance in search and online advertising. This rebound is significant, considering the unprecedented drop in Google's ad revenue following almost two decades of uninterrupted growth, especially during the initial stages of the pandemic.

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However, while Google's ad sales demonstrated growth, it lagged behind increases in other areas, such as cloud computing and YouTube subscriptions.

Despite the fourth-quarter results exceeding analysts' expectations, Alphabet's shares faced a dip of nearly 7 per cent in extended trading.

The company attributed its profit boost in the final quarter to the positive impact of artificial intelligence (AI).

Alphabet CEO Sundar Pichai said: “Each of these is already benefiting from our AI investments and innovation.”

More job cuts ahead in Google

CEO Sundar Pichai has alerted employees to anticipate further job cuts in the upcoming months, aiming to “simplify execution”.

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In a memo, Pichai said that the layoffs will concentrate on streamlining operations by "removing layers" from various departments to enhance the company's efficiency, according to the report. He clarified, "These role eliminations are not at the scale of last year's reductions, and will not touch every team."