A leaked memo suggests Alphabet will cut 12,000 jobs.

The news follows shortly after the announcement of a layoff round at Microsoft. 10,000 employees will be fired in the coming months. The tech giant intends to cut costs.

According to Reuters, Alphabet is taking similar measures. In a leaked memo, CEO Sundar Pichai explains that Google’s parent company will lay off 12,000 employees.

The layoff round affects teams across the company, including recruiters and engineers. Job cuts will take place worldwide and are effective immediately in the US, Reuters reported.

Alphabet layoff round

Alphabet’s share price dropped over the course of last year. Demand for technology exploded at the height of the COVID-19 pandemic. As the virus faded, demand declined.

Several companies hired large numbers of employees. Meanwhile, the situation has changed. Many can no longer afford inflated staffing costs.

Layoff rounds are prevalent cost-cutting exercises. In addition to Microsoft and Google, Amazon recently announced measures. 18,000 employees will lose their jobs. Meta and Salesforce disclosed similar plans. Economic uncertainty persists for now.

AI

“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI”, Pichai wrote in the memo. Investment in AI is a top priority for both Google and Microsoft.

Microsoft’s portfolio was recently expanded with integrations of OpenAI, a leading developer of AI applications. One of OpenAI’s best-known products is ChatGPT, a language model that generates texts and code based on user queries.

In late 2022, the New York Times reported that Alphabet CEO Pichai had overhauled hundreds of meetings in response to the rise of ChatGPT. The organization is reportedly concerned that the AI model may introduce competition for Google Search.

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