Google laid off 200 employees from its sales and marketing teams. IBM, Microsoft and other large companies have laid off employees in larger numbers as they combat the economic downtown, but Google's own layoffs could show that the search engine is girding itself for a protracted downturn, as well.
laid off 200 employees from its sales and marketing teams on March 27, raising
questions about its strength in the face of the current recessionary
The company claims that
were slashed in order to eliminate overlapping positions,
a side effect of
years of explosive growth. However, coupled with the February
2009 shutdown of its Google Audio Ads and AdSense for Audio projects
2009 layoffs of 100 recruiters,
the newest round of layoffs could suggest
that the company is preparing for the same sort of rough economic ride as IBM
quarter-over-quarter revenues remain robust, Google
has seen its profitability dip
thanks to growing softness in the online
Google employs some 20,200
workers, according to the Associated Press, meaning that the current layoffs
represent less than 1 percent of the total. Thus, in absolute numbers, and when
compared to the current round of massive layoffs at IBM, which
according to Alliance@IBM could total 4,000 to 5,000,
the Google layoff
numbers are miniscule.
"It seems like a judicious
cut," Roger Kay, an analyst with Endpoint Technologies Associates, said in an
interview, "and one that's more tactical than strategy-oriented. If Google had
laid off large numbers of engineers, that would be an entirely different story."
However, according to John
Byrne, an analyst at TBRI, the layoffs are potentially "concerning" in light of
Google's rapid hiring pace over the previous few years. "I attribute part of
this to the company taking the 'opportunity' of the recession to address the
kinds of inefficiencies that are likely to occur when you grow that quickly."
In his view, the layoffs
hint at a broader revenue crunch for online.
"Clearly it indicates that
Google does not like what it has seen from its advertisers thus far in 2009,
which does not bode well for other companies in online advertising, including
Yahoo, AOL and Microsoft," Byrne added in an e-mail. "It is
clear from more recent comments from Schmidt as well as the layoff decision
that Google is certainly feeling the pain as well, though not as much as its