Alphabet, Google’s parent company, is planning to fire 10,000 of its “poor-performing” staff.
According to sources, the IT giant has asked managers to identify 6% of its workforce using a new performance management system. This means that approximately 10,000 persons. Managers might use the new scoring system to identify underperforming staff and fire hundreds of them. Managers might also use the ratings to avoid handing out bonuses and stock grants to employees.
The announcement comes after activist investor Christopher Hohn, whose TCI Fund Management owns a $6 billion investment in Alphabet, recently encouraged the company to eliminate positions and salaries, reduce losses in the Other Bets subsidiary, and increase stock buybacks.
TCI Fund stated in a letter to CEO Sundar Pichai that remuneration and workforce are too high compared to other digital businesses and that the company might run more efficiently with much fewer personnel.
This year, Google has encountered several obstacles, ranging from the effects of the pandemic to widespread inflation.
Alphabet’s profits fell 27% in the third quarter, owing to lower-than-expected earnings and revenue. Furthermore, it previously declared that it would slow down the hiring process in the fourth quarter of this year. Alphabet now employs approximately 1,87,000 people.
Many large technology companies, including Meta, Amazon, Twitter, and Microsoft, have lately announced employment layoffs or recruiting restrictions in response to slowing growth.
Meta stated this week that it is laying off around 11,000 employees, or more than 13 percent of its workforce. Elon Musk’s Twitter cut off about half of its personnel just days after its $44 billion acquisition and is still firing employees.
Furthermore, Amazon announced this week that it has begun to undertake employment layoffs, beginning with the devices and services sector, blaming the challenging economy.
According to a source, Microsoft also notified layoffs across multiple divisions in mid-October, affecting fewer than 1,000 individuals.