Alphabet Inc (NASDAQ: GOOGL) is trading up this morning after the tech behemoth announced plans of a massive layoff to better prepare for the looming recession.
Job cut will begin immediately in the U.S.
The multinational, on Friday, said it will lay off 12,000 of its employees. The said cut, it confirmed, will start immediately in the United States but will take longer in other countries due to local laws.
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.
Google stock is currently down more than 20% versus its August high. Earlier this week, Alphabet Inc was reported to have deferred part of the employees’ annual bonus until April. Its health-focused business, Verily, announced a layoff recently as well.
Late last year, activist investor TCI Fund Management had pushed the Nasdaq-listed firm to lower its global headcount as Invezz reported here.
Alphabet to report its Q4 results in early February
In a memo to employees, CEO Sundar Pichai revealed the details of the severance package and said the cut will be made to various positions, product teams, and regions.
As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities.
The stock market news arrives only days before the Google-parent is scheduled to report its Q4 results. Consensus is for it to earn $1.17 a share, down meaningfully from $1.53 per share a year ago.
Nonetheless, Wall Street continues to recommend buying Google stock at the current discount.
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