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Google has faced several challenges this year, from the impacts of the pandemic to rampant inflation.
The parent company, Alphabet, showed a 27 per cent drop in profits in its third quarter compared to last year, with weaker-than-expected earnings and revenue.
And so the company’s new performance management system could help managers fire thousands of its underperforming employees from early next year, The Information reported last week.
Under the new system, managers have reportedly been asked to categorise six per cent of Alphabet’s workforce – corresponding to about 10,000 employees – as poor performers.
This system may also reduce the number of incentives and stock awards given to employees.
“It’s clear we are facing a challenging macro environment with more uncertainty ahead,” Google chief Sundar Pichai said in July.
He has been urging employees over the previous months to improve productivity.
“Look, I hope all of you are reading the news, externally. The fact that you know, we are being a bit more responsible through one of the toughest macroeconomic conditions underway in the past decade, I think it’s important that as a company, we pull together to get through moments like this,” he said in a meeting with employees.
Earlier this year, he introduced an effort called “Simplicity Sprint” as a response to concerns that the company’s productivity “as a whole is not where it needs to be for the head-count we have”.
In July, he called on employees in an internal memo to be “more entrepreneurial” and show “greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days”.
Many tech companies headquartered in the US have been laying off employees this year to save costs.
Last week, The New York Times reported that Amazon was preparing to lay off 10,000 staffers from its devices organisation, retail division, as well as human resources division.
Earlier this month, Facebook owner Meta said it was laying off thousands of employees, equivalent to 13 per cent of its workforce.
Elon Musk laid off nearly half of Twitter’s workforce earlier this month just days after closing the deal to buy the social media giant for $44bn and becoming its new owner.
