Google laid off 12,000 — the first mass layoff that shattered its reputation as a family

Google had long cultivated the reputation of being the world’s best employer — free gourmet meals, on-site massages, generous parental leave, and a culture slogan of “Don’t be evil.” On 20 January 2023, Alphabet announced it would lay off approximately 12,000 employees, or 6% of its workforce, the largest job cut in the company’s 25-year history. CEO Sundar Pichai said the company had hired for “a different economic reality than the one we face today.”

The cuts came after Alphabet had nearly doubled its workforce during the pandemic, from 119,000 employees in 2019 to 190,000 by early 2022. The company’s revenue growth slowed from 41% in 2021 to 10% in 2022, as digital advertising spending softened and the company faced increased competition from Microsoft’s Bing, which had integrated OpenAI’s GPT technology. Alphabet’s stock had fallen about 40% from its 2021 peak, though it remained profitable with $60 billion in net income for 2022.

The layoff was notable not just for its size but for the cultural betrayal it represented. Google had long promised employees that layoffs were not part of the company’s ethos, and Pichai himself had said in 2020 that the company would not resort to layoffs during the pandemic. The severance package included 16 weeks of base pay, two additional weeks for each year of service, and accelerated stock vesting. The cuts affected every department, with recruiting, news, and Google’s Area 120 incubator hit hardest.