An analyst is calling on Google to lay off employees, saying attrition alone will not be sufficient to cut costs.
The tech industry has been beset with mass layoffs amid an economic downturn that is impacting a range of industries. Virtually ever major tech player has already engaged in layoffs, but Google has so far managed to avoid them. According to Business Insider, Bernstein analyst Mark Shmulik says the company should rethink its stance.
“Google is likely going to find it difficult to reduce headcount growth below revenue growth without more drastic actions,” Shmulik wrote.
As Insider points out, Google has avoided layoffs as a matter of pride. The company has built a reputation as an employee-friendly workplace and has never conducted a mass layoff. Instead, the company has always relied on attrition to reduce its numbers, letting employees take jobs at other companies without putting forth any effort to stop them.
The current economic situation is no longer conducive to that approach. While there was a shortage just months ago, there is now a glut of qualified candidates as tens of thousands of tech workers have been laid off and are looking for work.
“The VC market has cooled dramatically, meaning there is no more funding to grow headcount, and the crypto market has imploded, which cuts out an entire subsector of the potential tech employment pool,” Shmulik wrote.
In the meantime, Google employees are already being subjected to tighter performance reviews, a measure that could be a precursor to layoffs.
“If you have a job at Google, you’re keeping your head down and hoping that cutting toro from the sushi bar is the only cut that affects you,” Shmulik added.