(RTTNews) - Alphabet, Google's parent company, is planning to lay off nearly 10,000 low performing employees starting early 2023 amid investor demand to downsize and cut costs, according to a report by The Information.
The tech major reportedly has asked managers to identify 6 percent of its staff using a new performance management system. This accounts for around 10,000 people. With the new ranking system, managers could find out its underperforming employees and push out thousands of lowest-ranked employees. The managers could also use the ratings to avoid paying staff bonuses and stock grants.
The news comes as activist investor Christopher Hohn, whose TCI Fund Management holds a $6 billion stake in Alphabet, recently urged the firm to cut jobs & salary expense, reduce losses in the Other Bets unit, and boost stock buybacks. In a letter to CEO Sundar Pichai, TCI Fund argued that compensation and headcount are too high compared to other tech firms, and that the business could be operated more effectively with significantly fewer employees.
Earlier, Google had announced that it will be slowing down the hiring process in the fourth quarter this year. At present, Alphabet employs around 1,87,000 employees.
Google's parent recently reported weak profit in its third quarter, below market estimates, hurt mainly by lower YouTube ad revenues. Revenues gained 6 percent, but missed Wall Street estimates.
Many major tech firms recently announced job cuts or hiring freeze amid the slowing growth, including Meta, Amazon, Twitter, and Microsoft.
Meta announced last week that it is laying off over 13 percent of its employees or more than 11,000 employees. Elon Musk's Twitter, following its $44 billion acquisition, laid off around half its workforce just days after the takeover, and still continues to fire employees.
In addition, Amazon last week said it has started to implement job cuts, starting with devices and services division, citing difficult economy. The company did not reveal the number of employees affected, but reports had said it was planning to lay off about 10,000 employees in corporate and technology roles.
In mid-October, Microsoft announced layoffs across multiple divisions, impacting fewer than 1,000 people, Axios reported citing a source.
