Google Job Cuts: Reports Say Alphabet Laying Off 10,000 Staff as Sundar Pichai Trims Costs

In the latest tech layoff, Alphabet is preparing to cut as many as 10,000 jobs, reports say. The job cut at Google parent will affect 10,000 'poor performing' employees, who make up about 6 percent of the tech giant's workforce.

The layoff will be rolled out as Google releases a new ranking system that rates employees on performance parameters, IANS reported, citing The Information.

"A new performance management system could help managers push out thousands of underperforming employees starting early next year. Managers could also use the ratings to avoid paying them bonuses and stock grants," says the report.

google parent alphabet overtakes apple
Letters spell the word "Alphabet" as they are seen on a computer screen with a Google search page in this photo illustration taken in Paris, France, August 11, 2015 Reuters

The newly minted performance appraisal system has wider significance for the employees as it reduces the percentage of employees who can score a high rating. The plan also streamlines bonuses and stock grants, the report says.

Alphabet, which has 187,000 employees, has not commented on the reports of the job cuts.

The Google parent's net profit in the third quarter was $13.9 billion, which marked a 27 percent drop from a year earlier. Alphabet's revenue, however, rose 6 percent to $69.1 billion.

'Blood on the Streets' Warning

In August, the search giant issued a stark warning to the staff in view of the dim outlook for the business climate. Google executives reportedly warned workers to either boost performance or prepare to leave. An internal message circulated among the employees warned that "there will be blood on the streets" if the next quarterly earnings are not good.

In a company message viewed by Insider, Google Cloud sales leadership threatened employees with an "overall examination of sales productivity and productivity in general." The message added that if next quarter results "don't look up, there will be blood on the streets.

Google global CEO Sundar Pichai
Google global CEO Sundar Pichai. IANS

Alphabet and Google CEO Sundar Pichai had earlier told employees that they must improve productivity due to fierce economic headwinds. Pichai said that he wanted to solicit ideas from his employees on how to get "better results faster."

The latest report says that Pichai is aiming to make Alphabet 20 per cent more efficient. According to Pichai, the company is investing in long-term projects like quantum computing. He adds that it is important to be "smart, to be frugal, to be scrappy, to be more efficient"

"We're committed to taking care of our employees. I think we're just working through a tough moment macroeconomically and I think it's important we as a company align and work together," said Pichai, IANS added.