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Thursday, February 2, 2023

Google Plans To Fire 10,000 Underperformers With The New Performance Management System

Employees with poor performance reviews will be terminated.

Google’s parent company, Alphabet, appears to be planning to lay off approximately 10,000 “low performing” workers, or 6% of its workforce. The decision was prompted by an activist hedge fund, unfavorable market conditions, and a need to cut costs. Employees with poor performance reviews would be terminated.

Reports in The Information indicate that Google is planning to gradually let go of 10,000 employees through a new performance and ranking strategy. Starting early in the next year, managers could be able to fire thousands of failing workers with the aid of a new performance management system. Managers might potentially use the ratings to prevent giving them bonuses and stock grants “the story made note of.

Reportedly, managers must identify 6% of workers, or around 10,000 individuals, as low performers based on their significance to the company. The number of employees who can receive a high rating has likewise decreased under the new approach. A billionaire hedge fund manager, Christopher Hohn argued in a letter to Alphabet that the business needs to hire fewer people. The UK investor also complained to Google’s parent company about how highly compensated its staff members are in comparison to those at other online businesses.

According to Hohn, the company’s headcount is “excessive” when compared to previous hiring trends and does not correspond to the needs of the current business climate. He claims that far fewer highly compensated professionals are needed to manage the search engine properly.

A report from the US Securities and Exchange Commission indicates that the typical pay at Alphabet in 2021 was roughly $295,884. The wage was more than 70% more than what Microsoft paid its employees. The salaries of employees at Alphabet are 153% higher than those of the 20 top tech businesses in the US. Many well-known US-based internet companies are cutting expenses, including Twitter, Amazon, and Meta. The majority of firms reported their largest-ever layoffs just over a month ago.

 

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