Analysis: Google’s measures in the economic downturn are not enough

With the global economic recession and the increase in inflation, many technology companies around the world started mass layoffs. Although technology giant Google, known for providing a safe and comfortable work environment for its employees, is against mass layoffs, according to an analyst, Google may not have another chance soon.

Google has slowed hiring, but that’s not enough

According to Bernstein analyst Mark Shmulik, avoiding the layoff situation as much as possible, Google used different methods to reduce its employees. Google, which does not try to convince its qualified employees who receive offers from big technology companies and start-ups and allows them to leave, will not find success in this method because other technology companies have started to lay off and stop hiring. Shmulik stated that “Google will not be able to reduce the increase in the number of people below the increase in revenue without taking more drastic steps,” and stated that the company will have to take different steps.

Recruiting 12,000 new employees in the third quarter of 2022, the company grew by 24% compared to the previous year, but profit growth was only 6% during this period. In Google’s latest earnings call, CEO Sundar Pichai and CFO Ruth Porat said they are aware of the situation and will slow hiring in the fourth quarter of the year. But analysts say the firm will hire 6,000 in the fourth quarter, even as it slows hiring, prompting shareholders to call for mass layoffs.

Shutting down services like Stadia may not be enough

Speaking to Insider, several former senior company officials said the company has earned a reputation as an employee-friendly workplace and doesn’t want to be stigmatized by layoffs. However, the company’s reservation about this issue causes the company to be slow to take decisive and important steps. Although Google canceled projects such as Stadia with the economic downturn, analysts state that such cuts will not be enough with the company’s reduced profit margin. It is unclear how Google will fight the economic downturn in the coming months, but the firm may go into mass layoffs in the coming months.