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Google will spend $700 million on severance this quarter

CEO of Alphabet and Google Sundar Pichai in Warsaw, Poland on March 29, 2022
In January 2023, Google laid off roughly 12,000 employees, or about 6% of its workforce.Mateusz Wlodarczyk/Getty Images
  • Google expects to incur $700 million in severance costs this quarter.

  • The costs were revealed in Alphabet's Q4 earnings report, released Tuesday.

  • Severance and related costs were $2.1 billion for 2023, following mass layoffs that year.

Google spent billions on employee severance following the company's mass layoffs last year, its latest earnings report showed.

Alphabet's earnings for the fourth quarter and fiscal year of 2023, released Tuesday, showed that the company also expects to incur $700 million in severance costs for this quarter.

Google started 2024 with additional layoffs following a previous round in January 2023. The company is laying off hundreds of workers across core engineering and hardware teams.

After the January 2023 layoffs, the company "recorded employee severance and related charges of $2.1 billion for the twelve months ended December 31, 2023."

Google reported $86.3 billion in revenue in Q4, up 13% year-over-year, and $307.4 billion for the fiscal year, up 9% year-over-year, the earnings report said.

Google laid off 12,000 employees, or roughly 6% of its workforce, in January 2023.

"Over the past two years we've seen periods of dramatic growth," CEO Sundar Pichai told staff in a memo at the time. "To match and fuel that growth, we hired for a different economic reality than the one we face today."

Affected staff were paid during the 60 day-minimum WARN notification period; offered severance of at least 16 weeks salary, plus two weeks for each additional year they worked at Google, and accelerated restricted stock units vesting. They were also paid 2022 bonuses and remaining vacation time.

Google's cuts were part of broader layoffs sweeping the tech industry last year as companies cited a need to cut costs after overhiring during the pandemic tech boom amid shifting economic conditions.

Read the original article on Business Insider