At the end of December 2022, Google had over 190,000 employees. On January 20, Google announced the layoff of 12,000 employees within the company, thus bringing the number of total employees by January 2023 to 178,234 full-time employees.
Explaining the layoffIn a blog post, “A difficult decision to set us up for the future,” Sundar Pichai, CEO of Alphabet, announced:
I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles. We’ve already sent a separate email to employees in the US who are affected. In other countries, this process will take longer due to local laws and practices.
He emphasized:
Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.
Sundar Pichai explained:
In the US, Alphabet
- Would pay employees during the full notification period (minimum 60 days).
- Would also offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
- Would pay 2022 bonuses and remaining vacation time.
- Would be offering 6 months of healthcare, job placement services, and immigration support for those affected.
- Outside the US, Would support employees in line with local practices.
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A hidden revenue business model is a pattern for revenue generation that keeps users out of the equation, so they don’t pay for the service or product offered. For instance, Google’s users don’t pay for the search engine. Instead, the revenue streams come from advertising money spent by businesses bidding on keywords.
Google (now Alphabet) primarily makes money through advertising. The Google search engine, while free, is monetized with paid advertising. In 2021 Google’s advertising generated over $209 billion (beyond Google Search, this comprises YouTube Ads and the Network Members Sites) compared to $257 billion in net sales. Advertising represented over 81% of net sales, followed by Google Cloud ($19 billion) and Google’s other revenue streams (Google Play, Pixel phones, and YouTube Premium).
Google is an attention merchant that – in 2022 – generated $224 billion (almost 80% of its total revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.3 billion).
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