Google’s parent company Alphabet is reportedly gearing up to lay off around 10,000 ‘underperforming’ employees or 6 percent of its total workforce in a season of big tech layoffs by Meta, Amazon, Twitter, Salesforce. According to a report by The Information, Google is planning to lay off 10,000 employees through a new ranking and performance improvement plan.
The report noted, “A new performance management system could help managers weed out thousands of underperforming employees as early as next year. Managers could also use the ratings to avoid giving them bonuses and stock grants.”
Under the new system, managers have been asked to classify 6 percent of employees, or about 10,000 people, as underperformers in terms of their impact to the business. The new system also reduces the percentage of employees who can receive high ratings.
Additionally, according to the report, Alphabet’s new performance system may use ratings to avoid paying bonuses and stock grants. Alphabet has not yet commented on the report. Alphabet has a workforce of around 187,000 employees.
Last year, the average compensation for an Alphabet employee was approximately $295,884, according to a US Securities and Exchange Commission (SEC) filing. Alphabet reported third-quarter net profit of $13.9 billion, down 27 percent from a year earlier, while revenue rose 6 percent to $69.1 billion amid a global recession.
The company’s CEO Sundar Pichai aims to make Alphabet 20 percent more efficient, hinting at job cuts. Earlier reports had surfaced that Alphabet is giving some employees 60 days to apply for new roles in the company.
Pichai said the company was “still investing in long-term projects like quantum computing. But it’s important to be smart, to be frugal and to be more efficient.” Pichai said, “We are committed to taking care of our employees. I think we are going through a difficult moment macroeconomically and I think it is important that we align as a company and work together.”
Earlier, while addressing the gathering at the Code Conference in the US, Pichai said that he feels very uncertain about the extent to which the company tries to understand the macroeconomic conditions.