Google LLC parent Alphabet Inc. today announced plans to lay off about 12,000 employees, or about 6% of its global workforce.

The job cuts affect multiple business units. According to the Wall Street Journal, Alphabet’s recruiting group and divisions focused on areas “outside of the company’s core businesses” will be particularly affected. According to CNBC, certain engineering and product teams are impacted as well. 

“Over the past two years we’ve seen periods of dramatic growth,” Alphabet Chief Executive Officer Sunday Pichai wrote in a memo to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today. I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI. To fully capture it, we’ll need to make tough choices.”

Alphabet didn’t reveal more specifics, but The Information today reported that among those laid off are some who had received high performance reviews, as well as some who made $500,000 to $1 million in compensation, according to managers the publication talked to. They covered Google Cloud, Chrome, Android and search under Prabhakar Raghavan, who heads search, ads, commerce and other units.

Google Cloud, in particular, was reported to have laid off “people in strategy, recruiting, and so-called go-to-market teams that provide salespeople with data, training and research for making deals,” as well as some salespeople.

Affected employees in the U.S. will receive at least two months’ notice, 16 weeks of severance pay and two additional weeks of pay for every year spent at Alphabet. The vesting of their restricted stock units will be accelerated by at least 16 weeks. Additionally, Alphabet intends to provide six months of healthcare, job placement services and immigration support.

“As an almost 25-year-old company, we’re bound to go through difficult economic cycles,” Pichai wrote in the memo. “These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities.”

The workforce reduction follows two smaller rounds of job cuts that affected Alphabet’s Verily life sciences and Intrinsic robotics units. 

Earlier this month, Verily reportedly let go about 15% of its workforce or more than 200 employees. The subsidiary also discontinued the development of its Verily Value Suite analytics platform, which helps healthcare organizations find opportunities to improve care delivery. Certain new product development initiatives were canceled as well. 

Shortly after word of the layoffs at Verily emerged, TechCrunch reported that Alphabet let go 40 employees from its Intrinsic subsidiary. Intrinsic develops software that reduces the amount of time and effort necessary to deploy industrial robots in factories.

In November, activist investor TCI Fund Management LLP issued a letter calling on Google to lower operating costs. The investment firm pointed to Google’s Other Bets segment, which includes its Waymo autonomous vehicle unit, as one area where spending should be scaled back. TCI argued in the letter that Google should reduce the segment’s estimated $6 billion annual operating loss by half.

Alphabet’s profit declined 26% year-over-year in the third quarter ended Sept. 30, to $13.9 billion. The consensus analyst estimate forecast a 10% profit decrease. The Google parent’s revenues grew 6%, to $69.1 billion, during the quarter.

Still, investors appear cheered by the impending cost cuts, as Alphabet stock rose more than 5% today. “Net-net, we think GOOG is well positioned to emerge from any prolonged advertiser pullback,” Cowen & Co. analyst John Blackledge wrote in a note to clients today.

Other major tech firms have also announced significant job cuts in recent months. On Wednesday, Amazon.com launched a workforce reduction initiative that is set to impact more than 18,000 employees. Also this week, Microsoft Corp. announced plans to let go 10,000 employees to lower costs.

Photo: Google