Google staring at another round of layoffs: Here's why
What's the story
The last few months have seen mass layoffs becoming a common occurrence. Some of the biggest tech companies in the world have been hit by the layoff season.
A few, including Amazon and Meta, announced two rounds of layoffs. Now, Google might join the club.
The possibility was hinted at by CEO Sundar Pichai during an interview with the Wall Street Journal.
Context
Why does this story matter?
Tech companies have been struggling for a while. After a fruitful run during the pandemic, most are searching for a sustainable way to continue their growth.
Google, one of the biggest companies in the world, is also looking for a way to drive its growth efficiently. However, it is a tough ask in an economy with several uncertainties.
More layoffs?
Pichai did not rule out more layoffs
Is Google going to fire more employees? When asked whether the company has similar plans to that of Amazon and Meta, Pichai said the company is "prioritizing and moving people" to important areas.
He did not explicitly say the company would fire more people. Neither did he say it will not.
He, however, admitted there is "a lot of work left."
Scenario
Google knows what it needs to do: Pichai
When asked under what scenario will Google consider more layoffs, Pichai said, "We are comfortable with our approach."
"We have a clear view of what we need to work toward, both in terms of innovating and making sure we are able to build the things we need to, as well as making sure we are being more efficient as a company," he added.
Efficiency
The company plans to re-engineer its costs durably
Mark Zuckerberg announced 2023 will be the "year of efficiency." Google also plans to improve its efficiency.
Speaking about making the company more efficient, the CEO said, "We're thinking about how to re-engineer our cost base in a durable way. We are definitely being focused on creating durable savings."
"We are pleased with the progress, but there's more work left to do," he added.
Challenge
Microsoft and OpenAI pose a significant challenge to Google's dominance
Pichai's comments come after Google parent Alphabet laid off 12,000 employees in January this year. It happened around the time when Bard, the company's AI chatbot, made its underwhelming debut.
Questions are being raised about the longevity of Google's dominance in search, with Microsoft and OpenAI breathing down its neck.
How will the company manage to be innovative in AI research while being efficient?
Reason
Google might need to save costs elsewhere
With its dominance in search at stake, Google will have to go lights out on AI research. For that, it must put significant resources into developing competitive alternatives to ChatGPT and GPT-4.
However, that might make being efficient tough. The only solution is to save costs elsewhere, which could lead to another round of layoffs.