Google Layoffs: How to Reverse a 55% Stock Decline

The inevitable is happening: Google (GOOG) is about to lay off people, up to 10,000 could be affected. Here is a look at Google’s headcount:

Google reports to the SEC that it has 20,123 employees but in reality it has 30,000. Why the discrepancy? Google classifies 10,000 of the employees as temporary operational expenses or “workers”. Google co-founder Sergey Brin said, “There is no question that the number (of workers) is too high”.

So who has been cut?

Google has been quietly laying off staff and up to 10,000 jobs could be on the chopping block according to sources. Since August, hundreds of employees have been laid off and there are reports that about 500 of them were recruiters for Google.

Google is the Web bellwether, so in a way, it’s good that they get this done to start the recovery. The longer Google sought to avoid the inevitable, the harder the landing. The only question now is: how steep is the decline and when will the landing come?

Still: It's madness. 10,000 people laid off from a company that generated $17B last year in revenues… with $10B in cash… but with a stock at 40% off its year-ago high, you knew this was coming.

Comments

[Buffett Jr:]

I think it's great news and make those overpaid pricks start brown bagging too.

2008 Nov 25 09:21 AM

[Yagottabe K...:]

It's very common to never speak of contractors when layoffs in general are being discussed; they are nonpersons as Google noted - and "operational expense".

That is to say, you can BET that Google is not alone in terminating contractors' contracts, most companies simply "don't bother" mentioning them.

2008 Nov 25 09:30 AM

[bricki:]

It is strange that companies don't talk about laying off contractors. Doing so has the exact same effect on a company. These days anyone working for a company in in exactly the same boat except perhaps whether or not the company pays certain payroll taxes for you or you have to pay them yourself.

2008 Nov 25 09:54 AM

[NW Tech:]

This is a one day story for the stock price.

Google is not run very effeciently. Just look how many interviews a prospective applicant goes through before a job offer.

The Google average is 8 interviews.

Laughable!

2008 Nov 25 11:56 AM

[ironer05:]

Visiting Google recently, I've noticed one small sign of these so-called "layoffs". The Googleplex has 4 buildings, with entrances a few tens of feet from each other. Until recently, each of them had a "visitor lobby", manned with receptionists; the other day, I noticed only one of the lobbies was manned, the other three are now marked "employees entrance" (employees can get in from all of those entrances, and more, by sweeping their badges).

So that's quite a few temp/contractor receptionists "laid off", I'm sure. Is it "madness" as you say? Pah: I say it was a waste before -- those extra temps added nothing to Google's business, and as a stockholder I'm quite happy that Google is FINALLY moving to *cut all waste*, big and small. So now when I visit I need to go to a specific lobby -- the one that's manned -- rather than wonder which of the four is right... big furry deal! Wish they'd done it before, but I'm glad to see their new CFO has gotten started the RIGHT way.

I could say the same of the "tea service" that used to interrupt some meetings and seem to have disappeared (now if you want tea you go to the "microkitchens" and make it yourself, instead of having tea service go around meeting rooms with a cart -- AGAIN, *big furry deal*!), the valet parking, the vast numbers of uniformed security guards who once roamed the grounds -- HIGH TIME the firm cut such wasteful frills!

2008 Nov 26 11:00 AM

[jenny:]

i think this is pretty natural for most companies right now. investors are still bullish about this company (www.predictwallstreet....) and i think that even though growth may be slow for them they are at least gaining market share, which is a lot more than most companies can say at this time.

2008 Nov 26 02:08 PM

[The Daily A...:]

When I first heard that Google laid off 5,000+ contractors last week and tried to sweep it under the rug I was pissed: they undermined consumers and blatantly disrespected the contractors who had served them well. That said, I think Google has redeemed themselves this week with the way they handled the layoffs of these 100 recruiters and the closing of the 3 engineering offices. I just wrote the following article on why I think Google's actions this week serve as an example for how every company should handle layoffs.

thedailyanchor.com/200.../

Jan 16 06:29 PM