The possibility of a second restructuring is being raised at Google, which has carried out the largest layoffs since its foundation.
According to related industries in Silicon Valley, California, on the 28th (local time), there are rumors inside and outside the company that Google announced a reduction in employees on the 20th, but restructuring has not yet been completed.
Google’s parent company Alphabet previously announced a plan to cut about 6% of all employees on the 20th and notified 12,000 people subject to dismissal.
However, it is not limited to this, but additional layoffs can be made.
An industry official said, “There is a rumor that the consulting side initially said that 20% of the workforce was needed,” adding, “There is anxiety inside that there is a possibility of further restructuring by reducing only 6% this time.”
Including Google, Alphabet’s entire affiliates have about 200,000 employees, with 20% reaching 40,000. Excluding the 12,000 first layoffs, 28,000 people are eligible.
Although high-paying people such as $1.2 million per year were included in the first restructuring target, the inclusion of a number of employees with poor evaluations is also raising the possibility.
The official said, “There are concerns that employees with relatively good evaluations will be dismissed and that ‘next time, they will be eradicating the undervalued in earnest’.”
The first layoff is a prerequisite for full-fledged second restructuring.
This observation also appears in a recent letter sent by hedge fund TCI, an Alphabet investor, to Google’s management.
TCI sent a letter to Alphabet CEO Sundar Pichai on the 20th, when Google announced its layoff plan, urging employees and spending to be further reduced.
The hedge fund called the decision “a step in the right direction” but said management still “must go further” to cut staff.
In the meantime, he stressed that the number of employees should be reduced to about 150,000, and for this, a 20% reduction in the number of employees is necessary.
In addition, he urged employees to reduce their salaries, saying that “excessive compensation” given to employees should be dealt with.
Alphabet has avoided reducing its workforce based on its solid market share in the search sector, but has been directly hit by slowing digital advertising sales due to concerns over an economic slowdown.
In its performance announced in October last year, sales fell 27% year-on-year to $13.9 billion, falling short of market expectations.