Google and Microsoft pull out as recession looms – RT Business News
Google plans to slow hiring for the coming year, while Microsoft has laid off a number of workers
Google and Microsoft are cutting new hires as the inflation-ridden U.S. economy threatens to tip into a full recession. Google CEO Sundar Pichai announced in a staff email on Tuesday that hiring would slow for the rest of the year, while Microsoft laid off employees in several divisions and offices on Monday, even though the company insisted on the fact that it would increase the number over the next year.
Pichai specifically cited the threat of economic recession in his email to Google staff, quoted by the media, explaining that the company will focus on « engineering, technical and other critical roles » for the rest of the year and for 2023 in the face of a « uncertain global economic outlook.” He called on employees to « be more enterprising, work with greater urgency, sharper focus and more hunger than we showed on sunnier days« , recognizing that »in some cases, that means consolidating where investments overlap and streamlining processes.”
While the sheer size of Google’s parent company Alphabet and the ubiquity of its products might make it seem recession-proof, recent expansion into less-than-profitable areas such as its smartphone business, devices laptops and its self-driving cars may have made the company of 164,000 people more vulnerable to what Pichai describes as « economic headwinds.” The company also added 10,000 new employees during the second quarter, and more in the third quarter, according to the CEO.
Microsoft, meanwhile, tried to downplay its layoffs, which affected less than 1% of the company of 180,000 people, as typical for the calendar period rather than a reaction to impending economic disaster. « Like all businesses, we regularly assess our business priorities and make structural adjustments accordingly.« , the company said in an emailed statement, pledging to »invest in our business and grow the overall headcount over the coming year.” However, in addition to this week’s layoffs, the company cut hiring in its Windows and Office groups in May.
The two megacorporations are far from the only industry giants losing weight in the face of mounting economic clouds. Meta, Facebook’s parent company, cut new hiring targets by 30%, CEO Mark Zuckerberg reportedly told employees the social media giant was suffering « one of the worst slowdowns [it has seen] in recent history.”
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Since May, ride-sharing company Lyft and social app Snap have announced hiring slowdowns, while Tesla not only cuts new hires, but fires 10% of its salaried employees.
Inflation in the United States is at its highest level in 40 years, and consumer sentiment is correspondingly low. The Federal Reserve has sought to rein in runaway price growth by raising interest rates, a move that analysts say risks triggering its own recession as the massive debts incurred by the average American become unmanageable.
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