Alphabet to slow hiring for rest of 2020

SAN FRANCISCO • Google parent Alphabet is slowing hiring for the remainder of the year, the most drastic action by the Internet search giant since the Covid-19 pandemic began battering its advertising business several weeks ago.

Chief executive officer Sundar Pichai told staff about the decision in an e-mail on Wednesday. He also highlighted other areas of cost cutting, saying the company will be "recalibrating the focus and pace of our investments in areas like data centres and machines, and non-business-essential marketing and travel".

A Google spokesman confirmed the memo and added that the company will maintain hiring momentum "in a small number of strategic areas", while "on-boarding the many people who've been hired but haven't started yet". At the end of last year, Alphabet was employing 118,899 people full time.

The announcement shows how the economic downturn triggered by the response to the coronavirus outbreak is affecting even some of the richest tech businesses. Microsoft, the largest software company, paused some recruiting recently, according to Business Insider.

Compared with start-ups that are firing thousands of workers, Google remains a haven for employees. But its revenue has likely been hit as businesses slash spending on advertising. The crisis has hammered the retail and travel sectors in particular, and these are major Google advertising customers.

"The entire global economy is hurting, and Google and Alphabet are not immune to the effects of this global pandemic," Mr Pichai wrote. "We exist in an ecosystem of partnerships and interconnected businesses, many of whom are feeling significant pain."

It is rare for Google to take such steps. It cut some jobs during the financial crisis of 2009, but has gone on a hiring spree in recent years, adding more than 20,000 staff last year. It also reported US$23.5 billion (S$33.5 billion) in capital expenditures, with a major part of that invested in data centres, computer servers and related items.

Alphabet shares slipped less than 1 per cent in extended trading on Wednesday. The stock closed at US$1,257.30 in New York, leaving it down 6 per cent so far this year.

Since the virus crisis began, Google has offered US$800 million in grants and customer credits, and given over 4,000 Chromebook laptops to schools. The company asked staff to work from home globally last month, and has not announced any job cuts.

BLOOMBERG