Google opts for slow hiring and cutting investment

Alphabet Inc’s Google will slow hiring for the rest of the year, chief executive officer Sundar Pichai told the company’s staff in a memo on Wednesday.
Google Cloud at IT trade show“We’ll be slowing down the pace of hiring, while maintaining momentum in a small number of strategic areas, and onboarding the many people who’ve been hired but haven’t started yet,” a Google spokesperson said.

Google CEO Sundar Pichai also highlighted other areas of cost cutting, saying the company will be recalibrating the focus and pace of our investments in areas like data centers and machines, and non-business essential marketing and travel.

At the end of 2019, Alphabet employed 118,899 people full-time as compared with 98,771 in 2018. Google cut some jobs during the financial crisis of 2009, but in recent years, it has gone on a hiring spree, adding more than 20,000 staff last year.

Alphabet / Google made an investment of $13 billion in new data center campuses across the US in 2019 that includes new data centers in Northern Virginia and Tennessee. Google has pledged an additional $3.3 billion for next two years to expand its data center footprint in Europe, says research firm MTN Consulting.

It also reported $23.5 billion in capital expenditures, with a major part of that invested in data centers, computer servers and related items, Bloomberg reported.

The announcement shows how the economic downturn triggered by the coronavirus response is even affecting some of the richest tech businesses. Microsoft, the largest software company, paused some recruiting recently, according to Business Insider.

“The global economy is hurting, and Google and Alphabet are not immune to the effects of this global pandemic,” Sundar Pichai wrote. “We exist in an ecosystem of partnerships and interconnected businesses, many of whom are feeling significant pain.”

Since the coronavirus crisis began, Google offered $800 million in grants and customer credits, and donated more than 4,000 Chromebook laptops to schools. The company asked staff to work from home globally in March, and has said it is covering wages and benefits for contract employees who work in its offices for a certain period. It has not announced any job cuts.

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