Jan 20 (Reuters) – Google’s parent Alphabet Inc (GOOGL.O) said Friday it is cutting off around 12,000 positions, or 6% of its staff, as Silicon Valley faces a tumultuous outlook and recent layoffs. Alphabet’s shares rose 3% in pre-market trading. The firm is making the cuts as it confronts a challenge to its long-held position in the technology sector.
For years Alphabet has enticed the best talent to construct Google, YouTube, and other products that reach billions of users, but it is now locked in competition with Microsoft Corp (MSFT.O) in a booming area known as generative artificial intelligence. The job losses at Alphabet come days after Microsoft announced it would lay off 10,000 employees.
In a memo to staff, Alphabet CEO Sundar Pichai said the company had reviewed its products, people, and priorities, leading to job cuts across geographies and tech. It had rapidly expanded for better times but faced “a different economic reality”.
“The fact that these changes will affect the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here,” said Pichai. Alphabet’s job losses involve teams in recruiting and some corporate functions, in addition to some engineering and products teams.
The layoffs are global and affect U.S. staff immediately. The memo said alphabet has already emailed affected employees, while the process will take longer in other countries due to local employment laws and practices.
The news arrives during a period of economic uncertainty as well as technological promise. “I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI,” Pichai said. Reporting by Jeffrey Dastin in Davos, Switzerland; Editing by Elaine Hardcastle and Alexander Smith. Our Standards: The Thomson Reuters Trust Principles.