Google takes USD 2.6 billion hit on account of workforce cut, office space charges
Google parent Alphabet has incurred $2.6 billion in charges related to reductions in its workforce and office space in the first quarter of this year.
BENGALURU: Google parent Alphabet has incurred $2.6 billion in charges related to reductions in its workforce and office space in the first quarter of this year. Alphabet, which reported $69.79 billion revenue in Q1,2023, in January, announced it will fire 12,000 employees across product areas, functions, levels and regions. “We are taking actions to optimise our global office space, and as a result we recorded charges related to office space reductions of $564 million in the first quarter of 2023. We may incur additional charges in the future as we further evaluate our real estate needs,” Alphabet said.
It said the majority of severance and related charges were recognised in the first quarter of 2023. It had said in January it would pay employees during the full notification period – minimum 60 days and it will offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google.
Its rival Microsoft, which slashed 10,000 jobs, had said in January that they are taking a $1.2 billion charge in Q2 related to severance costs, changes to its hardware portfolio, and the cost of lease consolidation.
Microsoft has beat Street estimates for its quarterly revenue and reported a 7% jump in revenue to $52.9 billion for the quarter ending March 31, 2023.
Satya Nadella, Chairman and CEO of Microsoft, had said while announcing layoffs that US-benefit-eligible employees will get a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, and continued vesting of stock awards for six months, among others.
Meanwhile, both companies are now focusing on Artificial Intelligence (AI).
“The world’s most advanced AI models are coming together with the world’s most universal user interface – natural language – to create a new era of computing,” said Nadella. “Across the Microsoft Cloud, we are the platform of choice to help customers get the most value out of their digital spend and innovate for this next generation of AI,” he said.
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