Layoffs at Google’s parent company: Alphabet to identify 10,000 underperforming employees and lay them off
The tech giant, which has managed to avoid the trend of layoffs in different sectors so far, now plans to cut 10,000 employees through a new ranking and performance improvement plan. This is due to pressure from an activist hedge fund, unfavorable market conditions and the need to cut costs, according to a report in The Information.
Alphabet’s new ranking and performance improvement plan
Under the new system, managers were asked to classify 6% of employees, or about 10,000 people, as underperforming in terms of business impact. Employees who are ranked among the worst performers will be terminated. The new system also reduces the percentage of employees who can score high.
On top of that, Alphabet’s latest performance system could use those ratings to avoid paying bonuses and stock awards to many employees. There is no official confirmation yet from Alphabet, which has nearly 187,000 employees.
Google overpays its employees
The need for the rating system arose after British billionaire activist investor Christopher Hohn sent a letter to Google’s parent company, claiming its employees were paid way too much compared to their counterparts at other tech giants. . The letter added that Alphabet’s overstaffed workforce needed to be reduced.
According to Hohn, the company’s workforce is “excessive” compared to past hiring trends and does not match the needs of the current business climate. According to a US SEC filing, the median compensation for an Alphabet employee last year was around $295,884. That’s almost 70% more than Microsoft paid its employees.
Massive layoffs in the tech space
After Meta and Twitter, Amazon also announced in a blog post that it would be making layoffs. The retail giant will cut 10,000 employees off the payroll, according to The New York Times.