Skip to main content

A Google office in Toronto in 2018.COLE BURSTON /The Canadian Press

Google and YouTube parent Alphabet Inc. GOOG-Q is cutting about 12,000 jobs worldwide, including in Canada, as the company confronts a slowdown in its rapid growth amid an economic downturn hitting the technology sector with a series of blows.

The cuts, which amount to 6 per cent of the California-based internet giant’s global work force, are piling on top of a brutal week of massive layoffs across the tech industry. Seattle-based Amazon.com Inc. AMZN-Q this week started its biggest-ever round of job cuts, culling 18,000 workers. And Washington-based Microsoft Corp. MSFT-Q is slashing 10,000 employees as it also cuts costs.

It is a continuation of the layoffs that first swept across the tech sector last year, when Meta Platforms Inc. META-Q, the parent of Facebook and Instagram, announced cuts of about 11,000 jobs and beleaguered social media network Twitter Inc. let go more than half of its employees.

Canadian tech companies have also been caught up in this new wave of layoffs in early 2023. Lightspeed Commerce Inc. announced it will shed 300 employees this week, while several other tech companies, including Hootsuite Inc., Thinkific Labs Inc. and Michele Romanow’s Clearco, have also cut hundreds of jobs in the past two weeks alone.

Over the years, a handful of U.S. tech companies have become global juggernauts, gaining trillion-dollar stock market capitalizations and dominating the markets. However, a sudden slump in 2022 dampened excitement in the space, in part due to macroeconomic challenges such as rising interest rates and soaring inflation.

Layoffs aren’t the only problem plaguing Big Tech, as giants struggle to innovate

Now, tech executives are openly acknowledging the sector’s troubles as stock market valuations crumble, share prices endure volatility and a period of risk-taking gives way to tightening of operations on all fronts.

On Friday, Sundar Pichai, chief executive officer of Alphabet, apologized to “Googlers” and told them the layoffs are intended to “sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities.” The biggest of those priorities is artificial intelligence, or AI, Mr. Pichai highlighted in his internal memo to staff.

“As an almost 25-year-old company, we’re bound to go through difficult economic cycles,” he said. “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.”

The cuts will come as setbacks to “product areas, functions, levels and regions” all across Alphabet and its subsidiaries. But Luiza Staniec, Google’s Canadian spokesperson, would not say how many jobs in Canada will be impacted by Friday’s cuts.

Asked about severance packages for employees based in Canada, Ms. Staniec referred back to a sentence in Mr. Pichai’s memo to staff: “In other countries, this process will take longer due to local laws and practices.”

A LinkedIn analysis suggests Google has at least 2,100 staff in Canada. In 2020, Google said its Canadian offices would be able to accommodate up to 5,000 employees by 2022.

The company began its business in this country in 2001, opening an office in Toronto with just one salesperson. In the two decades since then, Google has expanded its presence by hiring engineers, sales leaders and AI researchers at offices in Kitchener-Waterloo, Toronto and Montreal.

Mr. Pichai said U.S.-based workers will be paid during a 60-day notification period before being offered their severance packages, which will include a minimum of 16 weeks’ pay, plus two weeks for every additional year at Google. Those workers will also be offered health care benefits, job placement services and immigration support.

A company town hall will be held Monday to take questions from staff about the next stage for Google’s future, Mr. Pichai said.