In its quarterly report, the numbers showed a $2.1 billion charge for employee severance from early 2023 layoffs
In a surprising financial decision, the technology behemoth Google expended a substantial $2.1 billion in 2023 for severance and associated costs, resulting in the departure of more than 12,000 employees, as reported by The Verge.
Continuing with the trend of layoffs, the company has incurred $700 million in employee severance charges within the first month of 2024, targeting over 1,000 positions. Alphabet, the parent company of Google, disclosed this expenditure alongside its fourth-quarter earnings release on Tuesday.
Despite these workforce reductions, Google experienced growth in most of its key business sectors by the end of 2023. The company reported a revenue of $86 billion for the fourth quarter of 2023, marking a 13 percent year-over-year increase. The search giant’s primary digital advertising and cloud computing segments also demonstrated consistent growth, with CEO Sundar Pichai attributing it to Google’s investments in generative AI.
Nevertheless, although Google experienced growth in ad sales, it fell behind the surges observed in other sectors like cloud computing and YouTube subscriptions.
Despite surpassing analysts’ expectations in the fourth quarter, Alphabet’s shares saw a decline of almost 7 percent during extended trading.
The company credited the profit surge in the last quarter to the favorable influence of artificial intelligence (AI).
In a written communication, Pichai outlined that the layoffs would center on optimizing operations by eliminating hierarchical layers in different departments, aiming to enhance the overall efficiency of the company, according to the report. He provided further clarification, stating, “These role eliminations are not at the scale of last year’s reductions, and will not touch every team.”
