Home Business & Economy Google’s parent company Alphabet plans to layoff 10,000 employees based on new performance method

Google’s parent company Alphabet plans to layoff 10,000 employees based on new performance method

Alphabet has a workforce of nearly 187,000 employees and is yet to comment on the reported mass layoffs that may hit the company in days to come or early next year.

by News Desk
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After Twitter, Facebook, Amazon, and now Alphabet, Google’s parent company, is reportedly gearing up to lay off about 10,000 employees or 6 percent of the workforce over “poor performing” employees, as per a new performance rating method.

According to a report in The Information, Google plans to ease out 10,000 employees through a new ranking and performance improvement plan.

“A new performance management system could help managers push out thousands of under performing employees starting early next year. Managers could also use the ratings to avoid paying them bonuses and stock grants,” the report mentioned.

Under the new system, managers have been asked to categories 6 per cent of employees, or roughly 10,000 people, as low performers in terms of their impact for the business.


The new system also reduces the percentage of employees that can score a high rating.Additionally, the new performance system at Alphabet could use the ratings to avoid paying bonuses and stock grants, according to the report.

However, Alphabet has yet to comment on the report. Alphabet has a workforce of nearly 187,000 employees. The median compensation for an Alphabet employee last year was around $295,884, according to a US Securities and Exchange Commission (SEC) filing.

Alphabet reported a net profit of $13.9 billion in the third quarter (Q3), down 27 per cent from a year earlier, while revenue increased 6 per cent to $69.1 billion, amid global slowdown and recession fears.

The company’s CEO Sundar Pichai aims to make Alphabet 20 per cent more efficient, hinting at job cuts.

Reports earlier surfaced that Alphabet was giving some workers 60 days to apply for a new role at the company if their jobs are set to be cut. Pichai had said the company is “still investing in long-term projects like quantum computing. But it’s important “to be smart, to be frugal, to be scrappy, to be more efficient”.

“We’re committed to taking care of our employees. I think we’re just working through a tough moment macro economically and I think it’s important we as a company align and work together,” said Pichai.

Earlier, addressing the gathering at the Code Conference in the US, Pichai said that the more the company tries to understand the macroeconomic conditions, it feels very uncertain about it.

“The macroeconomic performance is correlated to ad spend, consumer spend and so on,” he told the audience. Google has suspended hiring new employees and reportedly told some existing employees to “shape up or ship out” if expectations are not met.

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