The labor market, which has been consistently saturated with employees is clearly showing indications of slowing down, as certain companies are starting the new year by reducing their workforce. On Tuesday, Google revealed plans to lay off hundreds of employees in its advertising sales team, signaling ongoing workforce reductions at the Alphabet-owned company.
Google is joining the bandwagon of tech companies turning to artificial intelligence software and automation to streamline operations rather than human labor. While discussions and questions about why Google is laying off employees are yet to settle, other companies have also declared plans to lay off staff this year.
The roles receiving this harsh blow at Google include the Assistant team, the augmented reality hardware division within the devices and services product area(hardware teams overseeing Pixel, Nest, and Fitbit), and the central engineering team. The company attributes these layoffs to its efforts to enhance efficiency, realign resources with its major product priorities, and bring about improvement across the board.
A spokesperson for Google explained, “We’re responsibly investing in our company’s biggest priorities and the significant opportunities ahead. To best position us for these opportunities, throughout the second half of 2023, a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities. Some teams are continuing to make these kinds of organizational changes, which include some role eliminations globally. We’re continuing to support any impacted employees as they look for new roles here at Google and beyond.”
Shares of Google’s parent company, Alphabet, experienced a 0.9% decline in intraday trading following reports of the layoffs. Google confirmed that the restructuring will result in the elimination of hundreds of roles. This workforce reduction follows Google’s previous major layoff in early 2023, where approximately 12,000 employees, constituting about 6% of its workforce, were let go.
Several companies, such as Amazon, Twitch, Duolingo, Discord, Macy’s, Citigroup, BlackRock, etc have recently revealed plans to reduce their workforce. Some of these companies, which are currently implementing job cuts, had previously carried out more extensive layoffs over the past year or so. Since then, both inflation and expectations for a recession have decreased, contrary to the predictions made by most economists as recently as the middle of last year.
In October of the previous year, the continued downturn in aviation revenues caused by the impact of the pandemic led Rolls-Royce to lay off 6% of its employees. Concurrently, Microsoft’s professional social media platform, LinkedIn, undertook workforce reductions, laying off 668 employees across engineering, product development, talent acquisition, and finance departments. This move followed a prior reduction of 716 staff in May of the same year, which was accompanied by the closure of its job application operations in China.
How do Layoffs Impact Employees?
Experiencing a layoff can bring about severe financial hardships for those affected. The abrupt termination of employment translates to the loss of a steady income, employee benefits, and various job-related perks. Despite the provision of severance packages, many individuals may find it difficult to meet their financial obligations, particularly if they are responsible for supporting a family or contend with high living expenses. The resulting stress, stemming from the inability to cover bills and provide for loved ones, can significantly impact the mental and emotional well-being of those who have been laid off.
The turmoil triggered by layoffs and the subsequent career transitions can deeply affect the mental health of individuals. Confronting uncertainties, financial constraints, and the pressure of re-entering a competitive job market can elevate levels of stress, and anxiety, and even contribute to feelings of depression. Furthermore, the loss of a familiar work environment, daily routine, and a sense of purpose can compound these challenges, fostering a sense of helplessness and diminishing self-esteem.