Receive a layoff email in your sleep! Google lays off 12,000 employees worldwide, and the era of high salaries for technology talents is coming to an end?

In just three days, the three technology giants Microsoft, Amazon and Google laid off a total of 40,000 employees.

On the 20th local time, Google CEO Sundar Pichai confirmed in an employee letter that about 12,000 employees will be laid off worldwide, accounting for more than 6% of the total number of employees, which is the largest round of personnel reduction in the company's history. Among them, the layoffs in the United States will take effect immediately, while in other countries, the layoff process will take longer according to local laws and practices. The company disclosed that the compensation package in the United States includes a minimum 60-day notice period, the laid-off employee will receive severance pay equivalent to 16 weeks' wages, in addition to an additional two weeks' salary compensation for each full year of service.

Cheng Xi (pseudonym), a programmer working at Google, told the first financial reporter that he was lucky that he was not affected. "If you are fired by the company before the Spring Festival, it will be too sad." Cheng Xi once revealed to the first financial reporter on the 5th of this month that the company's employees circulated internally that large-scale layoffs would be officially announced this month, and they did not want to make a statement.

Received a redundancy email in my sleep

According to Google's internal email obtained by the first financial reporter, Pichai distributed an employee letter at 2:18 a.m. local time on the 20th, when most of the American employees were asleep.

"We've seen an amazing period of growth over the last two years, and we've done a lot of hiring to match and drive that growth, but the reality we face today is completely different," Pichai wrote. He added: "The fact that layoffs will affect the lives of Google employees is deeply heavy for me, and I take full responsibility for the decision to lay off employees." ”

The layoffs involved Google's various business segments and different regions, and the recruitment department and projects outside the core business were more affected. Cheng Xi said that non-customer-facing, non-engineering and operational positions have become the focus of this round of layoffs, and the reason why he is temporarily safe may be because his department has contributed considerable revenue to the company, and revenue has continued to grow.

Pichai mentioned AI several times in the email, saying that there are plenty of opportunities in the field of artificial intelligence and that it is a key area for Google to invest in.

According to a Google employee told the first financial reporter, shortly after the Pichai email was sent, Google Cloud CEO Thomas Kurian sent a letter to the department to try to boost morale, saying that cloud computing is still one of the largest and fastest-growing businesses within Google and is the area where the company continues to invest.

The era of high salaries for tech professionals is about to pass?

Over the past year, U.S. technology companies have faced many challenges, with sharp rises in interest rates and high inflation hitting the technology sector. The Fed's interest rate hike has sent money out of tech stocks, and the downturn in the macro environment has forced advertisers to cut back on online ad spending, which in turn hit the performance of technology companies. All of these factors are thought to put pressure on tech companies to lay off jobs.

On the 18th, Microsoft confirmed that it intends to cut about 10,000 employees by the end of March, with a layoff rate of less than 5%, but it is still the largest personnel reduction in the company's more than eight years. On the same day, Amazon confirmed the launch of a 18,000 layoff plan, the largest "slimming" measure in the company's 28-year history, and the largest number of layoffs in the history of technology companies.

At present, among the five major technology giants Facebook parent company Meta, Apple, Amazon, Microsoft, Google, only Apple has not yet laid off news, but there is news that Apple CEO Cook voluntarily cut his salary by 40%. The first financial reporter learned from Apple employees that the company has not adjusted employee compensation or bonuses.

Chen Zhijian, director of public relations at Blind, an anonymous workplace social networking software, said in an interview with the first financial reporter that professionals have been discussing the transformation of the job market recently. "In the past two years, professionals have often had multiple hiring opportunities and can compare between different companies with good salaries and benefits, and now they expect the era of high salaries to come to an end," he said. ”

According to a recent survey by Blind, 46% of professionals surveyed believe that compensation in 2023 will be lower than last year, and only 16% believe that this year will be higher than last year.

In Google's layoffs, some employees earning more than $500,000 a year revealed they were laid off. It is believed that Google may take this opportunity to fire more high-ranking or high-paid employees to reset the salary standard. Chen Zhijian said.

Will there be spillover effects?

The next US non-farm payrolls report will be released on February 3, will the wave of layoffs in technology companies spill over to the broader labor market?

Rachel Sederberg, senior economist at Lightcast, a job market analysis agency, told First Financial Reporter: "Technology talents often have transferable skills that make it easy to switch to different companies and positions, and they may soon find their next home." I don't think the wave of layoffs at tech companies will affect the economy as a whole, especially as the overall labor market remains tight. ”

She said that despite the considerable layoffs of tech giants since the beginning of the year, looking back on the pandemic, their hiring speed was much faster than before the pandemic, largely due to the surge in consumer demand for digital services due to lifestyle changes triggered by the pandemic, reflecting the operational adjustment of technology companies and the shift in consumption habits in the post-pandemic period.

Chen also agrees with Sidberg to some extent: "U.S. layoffs continue to focus on technology and banking, the overall job market remains strong, many companies still have hiring difficulties, and 'laid-off' technicians tend to find new jobs in 90 days or less." ”