The Information reports that Google may want management to pick which 10,000 people are its poorest performers. This is likely an advanced warning that these people will be fired. It adds to the tech layoff bloodbath.
The Information claims low performers are chosen based “in terms of their impact for the business.” The move also may save Google payment of bonuses, which is another way to cut costs.
A poor performer label is hard to apply. Have these people been poor performers recently? Are they likely to have an outsized influence on Google’s success in a few years? Google aims to put 6% of its workers into the special bucket. All the more reason to dump them when the time comes.
The Google plan is another sign of employee overbuilding among America’s largest tech companies. Amazon and Meta already have announced specific numbers of cuts. Twitter, a case of its own, has let over 4,000 people go. That number is likely to rise, although CEO Elon Musk is asking back people he thinks are important.
Overbuilding has resulted in misplaced optimism among American businesses for decades, if not longer. People are added to expand companies with new projects expected to increase sales. This is in contrast to keeping headcount steady to do a good job on successful products already in the field. CEO overreach but cannot be helped. The premium of growth over profits and stability is just too great.
The other factor CEOs who add employees miss is that the economy always slows. The only difference is when it will slow and how long. The current recession could last well into next year and worsen.
Another common part of the layoff process is that chief executives often admit they were wrong to build headcounts too high. Yet, they rarely lose their jobs and their pay packages remain huge.
Google may junk 10,000 people, but CEO Sundar Pichai is not going anywhere.
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