There’s been plenty of speculation about what Google’s mass layoffs last year meant for its famous culture. But what about the impact on its bottom line?
The 2023 job cuts, which totaled some 12,000 in January alone and left employees shocked, cost Google $2.1 billion, Business Insider’s Sarah Jackson reports. Alphabet shared the number as part of its fourth-quarter earnings report on Tuesday.
The cutting costs don’t stop there. The tech giant also reported it expects to incur an additional $700 million in severance costs this quarter.
Google already laid off hundreds of employees this month, impacting everything from advertising to central engineering. And CEO Sundar Pichai reportedly told employees there will be more to come.
This year’s layoffs have led some Googlers to start fighting back amid what they believe is a destruction of the company’s culture.
Paying nearly $3 billion to lay off employees wasn’t the only sore spot on Google’s earnings report. The company’s revenue for its search business, its bread and butter, fell just short of Wall Street estimates.
Google’s revenue for the quarter ($86.3 billion) and fiscal year ($307.4 billion) showed year-over-year growth — 13% and 9%, respectively — and topped analysts’ estimates. But that wasn’t enough to soften the blow of Google’s core business not meeting expectations, as its share price dropped during after-hours trading.
Adding salt to Google’s wound was Microsoft’s success last quarter due to its AI products.
The fellow tech giant posted $62 billion in revenue, an 18% increase. The growth was largely thanks to its big bets in AI paying off.
The earnings results validated the company’s strategy to move quicker than some of its peers during the early stages of the AI race. Meanwhile, rivals like Amazon and Google have scrambled to respond.
(Never one to be satisfied, shares of Microsoft dropped a bit in after-hours trading as investors were looking for even more AI-fueled growth, Bloomberg reported.)
Still, Microsoft’s big revenue growth shows the tech giant is on the right track as it looks to cement itself as the go-to destination for companies looking to leverage AI.
source: Business Insider