Google CEO Sundar Pichai announces 10% layoffs in managerial roles to improve efficiency

As part of a long-running initiative to double efficiency, Google has let go of 10% of its managerial workforce. CEO Sundar Pichai said during a Dec 18 all-hands meeting that the manager, director, and vice president positions would be the ones to be slashed.

According to a Google spokesperson, some of the laid-off workers would be "transitioned to individual contributor roles," while others would be "role eliminations."

This news follows the quick advancements in the field of AI and the rise of competitors like OpenAI, whose products have been deemed by industry analysts to pose a threat to Google Search, the company's online search division, which generated more than 57% of its income in the previous year.

In response, Google launched Gemini 2.0, its most sophisticated AI model to date, this month and included generative AI capabilities in its products.

According to Pichai, the new model would usher in "a new agentic era" of AI models that can comprehend and make decisions about the outside world.

A day after Google's stock had already risen 3.5% on the release of a groundbreaking quantum processor, the announcement sent the company's shares skyrocketing by more than 4% on Wall Street.

Including the removal of "a few hundred" workers from its global ads team in Jan and an additional 100 jobs across its cloud segment in June, these layoffs mark the fourth this year alone.

Google, which is owned by Alphabet Inc., began its efficiency campaign in Sep 2022.

More than 12,000 positions, or 6.4% of the company's worldwide workforce, had been cut by Jan of the following year.

Pichai accepted "full responsibility for the decisions that led us here" in an open letter to staff members at the time, but he added that the business needed to support earlier eras of explosive expansion.

He then claimed that the cuts came after a "rigorous" and corporate-wide efficiency assessment that examined Alphabet's product divisions, functions, levels, and geographies.

He also acknowledged that the business should have done a better job of managing the layoffs.

"This is difficult for any company to go through. At Google, we really haven't had a moment quite like that in 25 years... (but) it became clear that if we didn't act, it would have become worse,” said Pichai.

Meanwhile, in the same meeting, Pichai discussed transforming the corporate culture and the need to reinvent its "Googleyness"—an" amorphous phrase that has meant various things over the years but is widely believed to convey what Google looks for in potential hiring.