Wall Street expects more layoffs at Google-parent Alphabet in the wake of job cuts at Microsoft and other tech companies. But as Google stock dropped during 2022, the company continued a hiring spree late into the year that started when the coronavirus pandemic hit.
When fourth-quarter results for GOOGL stock come Feb. 2, management will likely face questions on head count reduction on the earnings call. In a Jan. 13 report, Oppenheimer analyst Jason Helfstein hiked his 2023 operating income forecast on an expected "workforce reduction."
Alphabet had nearly 187,000 employees as of Sept. 30 amid its hiring bonanza. In the September quarter, Alphabet added 12,765 employees, which was above Wall Street estimates. In the first nine months of 2022, the company added about 30,300 employees versus 21,000 in 2021 and 16,000 in 2020.
Software giant Microsoft on Wednesday announced plans to lay off 10,000 employees, or about 4.5% of its workforce. Microsoft's announcement came before its fourth quarter earnings report. Earnings for MSFT stock are due Jan. 24.
Google Stock: Hiring Slowed?
According to a Morgan Stanley report, Alphabet has added 63,700 employees since the onset of the coronavirus pandemic in the second quarter of 2020. Much of the hiring has been at Google's cloud computing business.
On its September-ended quarter earnings call, the company told Google stock analysts that it expected to add 50% fewer workers in the fourth quarter — about 6,800.
One possibility is that in 2023 Google could cut workers rated as low performers in reviews.
Activist hedge fund TCI Fund Management in November called on Alphabet to cut costs and reduce operating losses at long-term bets, such as the Waymo autonomous vehicle business. Google cut jobs at Verily Life Sciences, a health care unit, as well as robotics startup Intrinsic, in early January. Verily laid off 200 employees while Intrinsic let go 40 employees, according to reports.
On the stock market today, shares climbed 2.1% to close at 93.05. Google stock has climbed 5% in 2023. Shares dropped 39% in 2022.
Meta Platforms, Salesforce and Amazon.com also have announced job cuts.
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