Google parent Alphabet has announced a hiring freeze of 50% for the fourth quarter after the previous quarters’ earnings didn't meet expectations.
According to the tech giant, they had added 12,765 people in the third quarter, including more than 2,600 joining Google Cloud as part of its acquisition of Mandiant, according to Alphabet and Google CFO Ruth Porat. Overall, Alphabet has 1,86,779 employees worldwide
Alphabet and Google CEO Sundar Pichai said that the firm has started its work to drive efficiency by realigning resources to invest in its biggest growth opportunities
“Our Q4 headcount additions will be significantly lower than Q3 by half. And as we plan for 2023, we’ll continue to make important trade-offs where needed and are focused on moderating operating expense growth,” he added.
Alphabet posted third-quarter revenue of $69.1 billion, slightly below analysts’ estimates of $70.58 billion.
The revenue growth slowed to 6% from 41% in the corresponding period of the last fiscal year. This led to Alphabet’s net income dropping to $13.9 billion (or $1.06 per share) from $18.9 billion ($1.40 per share) in the year-ago period, missing analysts’ expectations of $1.25 per share, as per analytic website Refinitiv.
Google’s advertising revenue, including Google Search, YouTube ads, and Google Network, was $54.5 billion in the third quarter, compared with $53.1 billion in the year-ago period. The downturn indicates less investment and spending in the current economic climate
Interestingly, Google Search revenue rose 4% to $39.5 billion, from $37.9 billion in the prior-year quarter. On the other hand, YouTube’s ad sales decreased by 2% to $7.1 billion from $7.2 billion year-over-year. During the third quarter, Google Cloud revenue surged to $6.9 billion from $4.9 billion the year prior.
“We are sharpening our focus on a clear set of product and business priorities. The product announcements we have made in just the past month alone have shown that very clearly, including significant improvements to Search powered by AI, new ways to monetise YouTube Shorts, which will support the creator ecosystem, the strong series of hardware launches and a new partnership and product announcements at Cloud Next. These will all drive value for users, partners and our business,” Pichai said.