After Meta and Amazon, Google to lay off 10,000 employees
If this year has proven anything, it is that no one is immune to the layoff bug that has created havoc in Silicon Valley. After withstanding the phenomenon for a while, Google may have fallen prey to it, too. According to The Information, the tech giant could bring the ax down on about 10,000 employees in a performance-based review system starting early next year.
Why does this story matter?
Meta, Microsoft, Twitter, Lyft, Snap, Amazon...these are some of the tech bigwigs that had to fire their employees this year. Is Google joining that list? The company is yet to make any official announcements about job cuts. However, its new performance review system can be construed as a way to push out below-par employees. We will know what this is about sooner than later.
Managers tasked with identifying 6% of low performers
Google's new performance management system is in response to outside pressure to improve the company's workforce's productivity and to downsize. Under the new system, managers have been asked to identify 6%, or 10,000, of employees as poor performers. Employees will be put in this category based on their impact on the business. Previously, only 2% of the staff was placed in this category.
What happens to low performers?
The new system will allow Google to push out thousands of low-performing employees starting early next year. Being placed in the bottom 6% will also mean that they may be denied bonuses or stock grants. Google has asked managers not to inflate ratings. The percentage of employees that can score a high rating has also been reduced.
Activist hedge fund asked Google to reduce workforce
Last week, UK billionaire and activist hedge fund manager Christopher Hohn wrote a letter to Alphabet, Google's parent company. In the letter, he talked about cutting down Google's bloated workforce. He also pointed to how Google pays its employees a lot more than other tech companies. Hohn asserted that the company could function efficiently with fewer highly compensated individuals.
Google paid employees 70% more than Microsoft in 2021
In his letter, Hohn also mentioned that the median salary of an Alphabet employee in 2021 was $295,884. This exceeded what Microsoft paid its employees by around 70%. Hohn said that Alphabet paid its employees 153% more than what competing firms did in the US.
