Summary Labor Rights & Economic Security Undermines
This January 2023 CEO blog post from Google announces organizational 'difficult decisions' in response to 'economic cycles,' implicitly referencing workforce restructuring. The visible content frames employment impacts as inevitable market responses without observable commitments to fair labor standards, worker protections, severance, retraining, or participation in decisions. Google's corporate structure demonstrates no mechanisms for worker voice or accountability for livelihood impacts.
Question for those who got laid-off from tech recently (say since Aug last year): how hard did you find it to get another tech job?
Would be interesting to get some anecdotal evidence to shed light on the following WSJ article which claims laid-off tech workers are finding it easy to get re-recruited:
If the phenomena described in the WSJ article is true then the consequence to the macro environment could be substantial and not in a good way. Basically the fed will probably need another round of hikes to really bring down unemployment to bring down core inflation. Since it would imply that (ironically) the recent fall in unemployment is "transitory" and not sufficient to bring down inflation.
I blame companies for blaming with people's lives like this: not market dynamics.
companies are the ones that decided to overhire, overpay - based on covid demand, cheap money that was floating around. companies not the market, resulted in a war over talent.
now it's a war on talent.
and of course everyone and their grandma will want to work at these tech companies where life is laid back and you get all the benefits and can express your political opinions.
but other big companies - say a tech company in the middle of nowhere e.g Epic - was paying good salary and not matching the faang / vc salaries. i'm sure those companies, if they didn't follow the herd ain't laying off people. their people are still employed, getting paid decent (enough). and work normal hours.
A lot of people seem to be chalking this one up in the “memetic imitation among tech execs” column. However, in the case of Google, I’m not so sure.
Google is an advertising business. And advertising revenue is extremely sensitive to changes in the economy (Companies cut ad spending when there isn’t as much demand to soak up). In the last recession Google was still rapidly stealing ad share from old media, but now they’ve won the game and are the market.
So this one makes complete sense to me. I’m sure everyone still thinks Google only hires engineers, but they actually employ A TON of ad sales people.
This 'I take full responsibility' thing is getting really tiresome. Of course you take full responsibility, you're the f'ing CEO, and in case on account of this someone loses their house I'm sure you'll make good on it, because it's your responsibility, right?
Another multi-billion dollar company making billions of dollars of profit dumps thousands of staff on the streets.
There are two approaches here.
Firstly, attrition, simply don't replace those that leave. Given the sheer size of the company, a hiring freeze and attrition would gradually reduce the size of the workforce. I'd be astonished if a company with a market cap of $1.2 trillion would be likely to collapse if it didn't immediately get rid of 12,000 people right now.
Second, stop over recruiting in the first place.
I'm sure google, like the others this week have some company mantra about how precious their staff are, and they're all family. Until they're not.
I work for a company about twice as big as Google. Getting permission to hire anyone is very difficult, and everyone is always 100% busy just to meet customer deadlines(which we often don't).
I guess Google and other FAANG-type companies must work in a different way that I can't comprehend if they can just randomly decide to fire 10% of their workforce.
If 10% of the people on my project were fired, our customers would sue us for not delivering on the contracts we signed.
Are we about to enter a new era of ultra-profitable tech companies?
While companies like GOOG and MSFT have had ridiculously healthy margins compared to traditional industries for some time now, it's also been clear in recent years that these companies have become very loose with spending. Take GOOG for example, they spend so much unnecessary money on fancy offices, free lunches, diversity programs, highly speculative investments, stock based comp, etc.
But perhaps more importantly what happens when all the unprofitable tech companies with 80% gross margins decide to operate profitably? A lot of companies are so wasteful in tech today that they're actually choosing not to operate profitably so they can grow faster. We've seen Uber basically do a u-turn on this stance, but many other companies are following suite.
The media seems to think these cuts are a sign that tech companies are struggling and other industries like energy will now take the lead, but surely being able to drop 10-50% of your workforce with almost no consequences is a sign of strength not weakness?
I guess this whole time the most profitable companies in the world apparently weren't even trying that hard to be profitable.
Google had 156,500 full-time employees in 2021, an increase of nearly 16% year-over-year as compared to the 135,301 full-time employees in 2020. Google's pace of hiring was also torrid in the second quarter of 2022 as the company added 10,000 new employees to its 163,906 workforce - that is only through to July 2022.
These "Layoffs" are awful for individuals, but they are simply a sign that they went on a hiring spree in 2022 - plenty here were talking about the massive pay increases on offer all over the valley with demand off the charts.
If you've ever wondered, this is not about immediate money concerns.
In 2021 Google made $257 billion aka $257 000 000 000. And a profit of $76 bn aka $78 000 000 000.
It had 187 000 employees.
That works out to $1.3 million income per employee. And a net profit of $406 000 per employee.
They don't need to lay off anyone. They just want to.
I've seen smaller companies where they first shift employees around, offer everyone a choice, etc. People are only really laid off is things don't work out over many months or even years.
"Up in the morning and out to school
Mother says there be no work next year
Qualifications once the Golden Rule
Are now just pieces of paper
Well the factories are closing
and the army's full
I don't know what I'm going to do
I've come to see in the land of the free
There's only room for a chosen few. " -- Lars Frederiksen
I feel bad for everybody who spent the past 4 years going $200k into debt for a now worthless compsci degree. New grads, juniors and general employees who are not rock-stars, are in a miserable ride. As everybody casually writes it off to "over-hiring" you are forgetting the fact that there are 150k newly unemployed, a significant portion of whom will take many months, possibly a couple of years to find something. Meanwhile, all of those fresh graduates are now saying "Oh shit, I have to start making $2k/month student loan payments now, and don't have any income.
As an oldster observing what I believe my 4th tech downturn, I am currently advising people to go into the trades instead of becoming a software "engineer". The money can often be far better than tech, and there are actually more opportunities to advance than in tech.
If you consider inflation, offshoring, record profits for many companies who are still laying off, crypto crashing and rapid advances in AI-generated code, then you should be able to read the writing on the wall.
Remember a significant portion of these layoffs are coming from companies whose revenues and profits are increasing .. because they just don't need as many people to keep the investors and c-levels rich.
If you don't have at minimum 18 months worth of living expenses saved up when you get laid off, you could be in a world of hurt.
This comment from a NYT opinion piece by former Slack CPO added some clarity as to one reason why tech companies are doing this: pressure from investors to keep the share price up. Public companies lose that freedom to do whatever they want even if they have tons of money in the bank.
> Meta and Salesforce combined lost more than $700 billion in market cap last year. Both companies are now dealing with activist investors who have taken prominent positions in their stocks. The activists have called for the companies to slash costs, reduce nonstrategic investments and, notably in Meta’s case, aggressively reduce its work force.
The current flood of layoff news from FAANG level companies is surprising, sad, and pathetic.
As others have posted, they could keep the people on but they aren't, probably because it isn't financially optimal in the short term to do so. The two problems I see with that are (1) the loss of institutional knowledge, morale, and attractiveness as a place to work mean it is financially suboptimal in the long term, but companies right now are only thinking 1 quarter ahead (maybe 2); (2) it takes time to ramp up, get acclimated, and execute a vision - that clock resets for each position when someone is released and the a new hire is added back later.
It used to be that when you worked for one of the new big corps (FAANG and those like them) it represented some security.
Now I am saddened to see them adopting the big consulting corp model, where you can get released at will and staff is constantly being optimized for the current task set/direction/clients.
The Google of 2005 wouldn't do this. The Google of 2005 would use this as opportunity to monopolize all the talent and move into some new space and eat everything with fantastic software.
* I had a good seat to watch google obliterate mapquest and yahoomaps with amazing javascript maps. It was day and night. Yahoo was penny pinching their mapping engineers while Google was buying geographic satellite companies and innovating with lazy loading javascript maps. It went from, websites can't provide anywhere near the functionality of desktop apps to why would ever use a desktop app for that.
* I was building phone software and mobile search engines before, during, and after the launch of android so I got the inside perspective on cellular carriers reactions. Google was this a dinosaur ending asteroid to them and their wall gardens. They saw signs, then sky darkened and in their hearts they knew Google would build something 100X better than what they could ever build even if they wanted to give up their walled gardens which was a cognitive improbability. The carriers began going through the stages of grief, while they were still on anger, like the sound of thunder[0] android launched, and reality shifted under their feet. After that it seemed like nothing else had ever been possible or true.
Google’s best days may be behind it. The search revenue is looking increasingly shaky. New business units like GCP are struggling to operate profitably. They had an amazing cash cow (ad revenue) for a long time but that cow is getting old and starting to look rather ill. Compared to some of the other tech giants Google has struggled to evolve its business to diversify revenue and profit streams and evolve offerings. Now the make or break moment to make more progress there or the company will slowly drift off into the sunset of has-been tech giants.
> Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.
Translation: we fell for the economic mirage.
I'm not buying it. Google sees something on the economic horizon and is now bracing for impact. And that something is not a mean reversion. It's an overcorrection.
Google's main product, advertising, puts it in a unique position to see into the economic future. Google is a bellwether. If the coming recession were truly going to be "mild," then Google wouldn't care.
It's time for everyone in tech to admit that the last two years were a mirage driven in part by corporate FOMO. Many do, but I don't think they're prepared for what comes next.
> I take full responsibility for the decisions that led us here
When an incident occurs in prod and it affects the livelihood of 12.000 people (or more if you include family), you'd expect at the very least a post-mortem. I've never seen a company produce one after that.
What was the root cause? crazy hiring, massive wage war
Could the current situation be anticipated? hell yeah, out of a pandemic, war raging in Europe, petrol production going down, supply chain problems all over the world, resulting in inflation going massively up... Don't need an MBA to anticipate the economy was par for a correction.
what could you have done to prevent this? realize it was too good to be true. Don't enter the rat race, be cautious about hiring. Focus business.
what steps will you take in the future to prevent this from happening again? "I take responsibility" is a beautiful thing to say but it's completely empty if you don't take the consequences as well, and don't learn anything in the process. I bet you that if/when we recover from this dip, the same hiring practices as before will re-submerge so that resiliency doesn't move and we see the same move in another 5/10y. So I guess the answer to this question is "none, loyalty goes only one way and trust me when I tell you that no-one is safe"
> Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.
> Thanks to those early investments, Google’s products are better than ever.
Does he really believe this?
Maybe I'm just biased towards the parts that are annoying and I end up missing the good parts, but search seems worse every day.
I worry about using google products for anything essential due to the risk of being locked out with no recourse, or the product being unceremoniously dumped after a year. Chat (whatever it's being called that month) is always changing, and not for any benefit that I can see.
Their office suite is pretty impressive, but again I can't trust that it (or my files) will be there when I need them.
It is beginning to look like all the large companies that were hiring to deny talent to competitors are now feeling comfortable trimming the fat because they know that the startup fundraising scene has shifted dramatically in their favor (fewer potential competitors being funded), and they can trim costs and regain the initiative as far as having more leverage/bargaining power over current and future employees is concerned.
I would guess he means that they use AI algorithms to perform some of the tasks that are performed manually at most companies. If so, most of Google's customers wouldn't really consider this to be a win.
ML-driven account suspensions etc are universally hated and seem to have damaged Google's image, at least in the tech community.
> companies are the ones that decided to overhire, overpay - based on covid demand, cheap money that was floating around
But this concept of over-hiring and overpaying doesn't make sense.
There is no way to predict whether a positive economy will last 10 years or 10 months, and if you don't follow the economic growth you will lose bigger than if you follow it and have to make cuts later.
Everyone is quick to blame companies for "over-hiring", but they would also be quick to blame them for being too careful in a positive economy, and the market would punish them.
I'm not sure if you'd call it a pivot, but Google Brain was initially an X project that was started well before the deep learning craze took off. They hired Geoff Hinton in 2013. Investment in AI has been going on for a long time at Google, probably before Facebook/FAIR got seriously involved, but probably not Microsoft (MSR has been going for ~30 years and Chris Bishop started the Cambridge lab in '97 and they've long been known as a good ML group).
It's not like Google wasn't using ML before that either. Search, recommender systems for ads, anti-spam, translate. Deep learning just turned out to be a lot better than the tools we used to use.
I had a new job lined up roughly a week after they broke the news to me. The tradeoff is that I took a 37% reduction in salary.
Easily worth it. Everyone else is being laid off all around me, while I kick back and fire up a bunch of A100s for ML research. The best part is that I didn’t have to do any damn leetcode interviews.
I went back and forth on whether to post this, since it feels like I’m an outlier and maybe not relevant. But fwiw, I haven’t heard any stories among friends and colleagues of them getting laid off and finding it hard to find work. Devs seem safe, at least till GPT comes for us.
Is overhiring really a problem, would the world be better if companies didn’t overhire? Then many of the people now laid off wouldn’t have had a job in the first place. If you accept a job for what it is, a temporary need for your help, and plan for what’s next, a period of layoffs should become manageable.
Tier 1: Outrageous comp and difficult interviews.
Tier 2: Great comp and medium level difficulty interviews.
Tier 3: Companies that pay at or below average for an engineer and sometimes don't even have a coding interview!
for the tier 1s I was outright rejected my application twice as often as before. I also noticed that they are more selective. I've passed "high bar" technical interviews before, so have some understanding of what it takes. This time around I thought I did pretty well, but didn't get an offer (coincidentally at Google). More candidates + focus on cost cutting has made things much more competitive for really high paying jobs.
For those tier 2/3 jobs they are exactly the same as before. Recruiters constantly messaging and got an offer after only being on the market for a couple of weeks.
This all happened in the dotcom crash - all the companies shed staff.
It happened again during the credit-crunch.
It (used to?) happens in reverse every year in the banks - everyone watched Goldmans pay out bonus before xmas and then adjust their bonuses accordingly.
That would be the logical approach if their only objective were reducing headcount. In reality, it's both that AND they're trying to get the wage spiral under control. As terrible as it sounds, layoffs send the "stop asking for more money, you should be thankful to even have a job" signal to the workforce.
Google has been over-hiring for years. While there are definitely projects that felt understaffed, there are just as many where you'd join a team and look around and really have no idea what you should be doing with yourself because all the work seemed spoken for.
Honestly, 90-ish% of Google's revenue comes from ads. Almost every other product area there is just a financial loss unless it's supporting search&ads. They keep making "bets" to try to diversify the revenue stream, but it never works. Hence why I don't think this will be the last round of layoffs.
It will be interesting to see how this shakes out and what parts of the org and what roles this affected.
(Worked there for 10 years, so find this all... sad and interesting)
I think that your best employees are the people who are most likely to leave a company of their own accord, and so if you rely on attrition to reduce headcount you will also reduce the average quality of your workers.
A lot of these companies are building stuff now which might deliver revenue in X years, so by firing people now they're effectively borrowing money from the future; they cut costs now and revenue later. They're more sacrificing future growth than ability to deliver on current contracts, in general.
It's best to split 2022 in two. The first half was quite different from the latter.
I saw it in practice as I left Google at the end of 2021 and job hunted on and off through the year. The pace of hiring everywhere significantly dropped mid-2022.
Just a theory but in a downturn I could see a lot of companies increasing their ad spend as they lose existing customers and find they need to work harder to acquire new ones.
Obviously this doesn’t apply to advertising which is just gratuitous brand building.
Not even remotely comparable to the other things you listed. People such as yourself seemingly can't stop talking about it though, despite it having no effect on your life.
> Firstly, attrition, simply don't replace those that leave
Nobody is retiring - why would you, you get a fat pay cheque and once you get out of the meat grinder Jr levels life is pretty good. Oh and if they fire you rather than you retiring, they have to pay you another stack of cash and keep those options that vest in a few years.
"Seeing people posting about being laid off after 30 years of employment at Microsoft is a great example of corporate loyalty." - is this just a clean out of the expensive old folks after the hiring spree of late? Is it last in first out or first in first out? These are much more interesting discussions.
Google Ads, their most significant revenue stream, are entirely AI base, and speaking as an advertiser, it's only made it more crap. It's "ai" algorithms are designed to maximise value extraction from advertisers, rather than value creation for advertisers.
There has been a systematic trend over the last 10 years to remove the controls advertisers have over their placements and spend and move towards a black box we are supposed to trust.
A few years ago, I built an exact replica of a Saas product I saw online and priced it 1/3 theirs. The actual founder went mad and started a smear campaign. Lucky for him, Workload at my regular job picked up and I abandoned the project, but this highlighted the weak moats of most of these products.
and this is the main reason most companies overhire. It's so that engineers are less inclined to go home and build their own competitor.
It's an over-compensation for the earlier responses that blamed things on "unforeseeable market conditions" or something in a "we did everything perfectly and this is just the way the world is" kind of excuse.
It doesn't really help the people who are out of a job, but I think it's a nice gesture at least to say "this one is on us, we'll reflect on what went wrong and try to do things differently next time" even though I have around 0 faith that any of these leaders would hire less in another Covid-like scenario where funding was cheap and demand for their services was growing.
Wow! I worked at Google circa 2015 and there was an internal web page showing how many employees there were. My recollection is that there were about 50k full-time employees and 50k TVCs then. Even then, it felt crazy how large and incohesive the organisation was. I wonder what it's like now.
> They don't need to fire anyone. They just want to.
Why would they want to?
If they make so much money, why fire a few people for a massive amount of bad PR?
So seem to know the reasoning. Enlighten us please.
Google struck oil 20 years ago and money has been flowing in faster than they can spend it ever since. Some of that money let them drill more holes, and about 15 years ago some struck oil again.
Because it's worked in the past and they can afford it, they've continued drilling countless holes. For example, their many incompatible messaging systems [1].
Some of the holes seem to have been drilled without any regard as to whether finding oil in that location is even possible.
Presumably they hope to cut down on go-nowhere drilling, while still doing some drilling, in the areas where an oil strike is most likely.
Google is a company with a fiduciary obligation to maximize shareholder profits.
The average employee laid off is going to have 2 months of work - paid - to find a new job, plus an additional close to ~$80k or so to hold them over til they find a new job.
If Google hires people they don't need anymore - regardless of how good they are - are they supposed to just keep them on payroll indefinitely? Why?
Why are we feeling sorry for employees with great severance packages who are deep in the global 1%?
If the worst thing that happens to you in life is that you get laid off at Google, you've got a great life.
Life isn't all roses, there's ups and downs - and some people who were laid off are going to have a hard time, and that's sad. But it's also life.
Article references 'economic cycles' affecting company, implicitly impacting worker standard of living, but frames this as inevitable external condition beyond company responsibility. No observable discussion of unemployment insurance contributions, healthcare continuity, income support, housing security, or collective responsibility for ensuring adequate living standards.
FW Ratio: 33%
Observable Facts
Visible text: 'As an almost 25-year-old company, we're bound to go through difficult economic cycles.'
Inferences
Framing difficult economic circumstances as inevitable 'cycles' minimizes corporate agency and responsibility to protect workers' living standards.
Business-efficiency framing indicates company does not treat adequate standard of living as a right to guarantee but as a market outcome.
CEO announcement describes 'difficult decision' affecting workforce and references 'economic cycles' without addressing protections for workers' security of person or economic security. Frames organizational change as inevitable market response rather than choice with human impact responsibilities.
FW Ratio: 60%
Observable Facts
Article headline: 'A difficult decision to set us up for the future,' authored by Sundar Pichai (Google CEO).
Visible snippet: 'As an almost 25-year-old company, we're bound to go through difficult economic cycles.'
Published January 20, 2023, during peak tech industry layoff announcements.
Inferences
Characterizing workforce decisions as inevitable 'economic cycles' absolves company of agency and accountability for human security impacts.
Absence of visible protections or worker-centered framing indicates structural prioritization of business continuity over Article 3 security guarantees.
Article directly engages with right to work and fair conditions by announcing 'difficult decision' affecting workforce. However, no observable discussion of fair notice, severance, retraining opportunities, labor standards, union recognition, or worker voice in decision-making. Frames employment changes as inevitable business response rather than matter of collective choice with human rights obligations.
FW Ratio: 60%
Observable Facts
CEO message categorized as 'Company announcements' suggests organizational restructuring affecting employees.
Title references 'difficult decision' indicating consequential workforce-impacting choices.
Published during January 2023 tech industry mass layoff period.
Inferences
CEO announcement of employment-affecting decisions without visible discussion of worker protections suggests company views labor as a cost variable rather than human right.
Structural absence of worker voice in corporate decision-making contradicts Article 23's requirement for fair working conditions through democratic participation.
No observable engagement with preamble ideals of equal rights, dignity, justice, or peace. CEO announcement frames organizational decisions through economic/business lens.
Google's corporate structure provides no observable mechanisms for worker security, protection from arbitrary economic harm, due process in employment decisions, or support during transitions.
Google's corporate hierarchy and decision-making structure provide no visible mechanisms for worker protection, collective bargaining, fair conditions oversight, or appeal processes. Power concentrated in management; workers are subjects of decisions, not participants.
Google as corporation demonstrates no structural commitment to ensuring adequate standard of living for displaced workers. Corporate response to economic hardship is efficiency/cost-reduction rather than social insurance or stakeholder protection.
Corporate blog owned by large technology company; structural limitations on user expression or alternative viewpoints. No reader comment functionality visible.