Google Set to Pay $700 Million in Severance to Former Employees

Following a series of layoffs, tech giant Google is facing significant severance costs. The company, owned by Alphabet Inc., expects to make a substantial payout to former employees as part of their exit packages. This comes after notable staff reductions across various departments, impacting the company's workforce significantly.

Layoffs Leading to Severance Expenses

Last year, Google initiated a considerable reduction of its workforce, a move that is now reflected in the severance payments it has committed to disbursing. Alphabet's latest quarterly earnings report indicates an anticipated $700 million in severance-related expenditures for the current financial quarter. These layoffs included a large number of employees in core engineering roles and hardware teams, contributing to a notable shift in the company's employment figures.

Financial Impact and Response from Google

The financial implications of the layoffs are substantial, with Google having reported to incur around $2.1 billion in severance and related charges throughout the previous year. During January of 2023, Google let go of 12,000 employees, constituting 6% of its total workforce. Employees impacted by the layoffs received compensation throughout the 60-day WARN notification period, and were offered severance packages that included a minimum of 16 weeks of salary plus additional compensation based on their tenure at the company.

In response to the economic shift affecting Google's hiring strategy, CEO Sundar Pichai issued a memo to staff explaining the rationale behind the layoffs. This was attributed to a period of growth that had seen the company expand rapidly, which led to scaling up the workforce in anticipation of a different economic scenario than what later transpired.

Aside from the severance payments, Google also ensured that former employees benefited from the acceleration of restricted stock unit vesting, as well as payouts for any outstanding bonuses and accrued vacation time. Despite the layoffs, Google reported a significant increase in revenue, with Q4 earnings rising to $86.3 billion, a 13% year-over-year increase, and an annual revenue increase to $307.4 billion or 9% year-over-year growth.

Google, severance, layoffs