Tech firms seem to be laying off staff at massive rates and Following closely behind Meta/Facebook, Amazon and Twitter, the latest company that has been asked to do so is Alphabet the parent company of Google.
With the downfall in tech stocks, firms are attempting to cut costs. Managers at Alphabet have been asked to fire non-performing staff.
The company will examine each employee’s performance through stack ranking and if they are categorized as poor performers they will get the sack.
According to Forbes, Google may use this system of ranking to avoid bonus payouts and stock grants as well. Alphabet currently has 187,000 employees which is one of the largest numbers among tech companies.
Google has always been known as an employee-friendly company and pays more to its staff partly to retain talent from being pinched. But TCI hedge fund managing director and billionaire Christopher Hohn said that Google employees are paid a lot more than others in the industry and its hiring has outpaced the actual need of the company. TCI is an investor in the company and has shares worth six billion in Alphabet.
“We are writing to express our view that the cost base of Alphabet is too high and that management needs to take aggressive action. The company has too many employees and the cost per employee is too high,” said Hohn.
The US Securities and Exchange Commission reports that the average salary of a Google employee is 70 per cent higher than Microsoft. A CNBCTV report said that Alphabet offers its employees a salary that is 153 percent higher than 20 of the biggest tech firms in the US.
The problem is also that Google reported a net profit of $13.9 billion in Q3 which was 27 per cent lower than the same period last year. This drop was despite an overall six percent increase in revenue to $69.1 billion. This would definitely be a reason for Alphabet’s decision to cut back on staff.
It appears to be a month of lay offs as Facebook/Meta laid off 11,000 employees, Twitter has less than one third of its original workforce through both retrenchment and resignations and Amazon continues to fire people well in 2023.
Read More News:
Shawn Mendes dates his chiropractor, who is old enough to be his mother