The move, reportedly in response to pressure from hedge fund investors, comes at a time when the global financial situation is worsening due to geopolitical headwinds and high inflation.
The report by The Information said the new system of sorting out the poorest-performing 6% of employees would first allow managers to not pay them bonuses. Earlier, the same performance management system expected managers to identify only the bottom 2% of employees.
“As layoffs spread across Silicon Valley, Google has stood out by not cutting employees so far. But as outside pressure builds on the company to improve the productivity of its workers, a new performance management system could help managers push out thousands of underperforming employees starting early next year,” the report said.
Google employed around 1.56 lakh people at the end of 2021. A filing with the Securities and Exchange Commission revealed that the median salary at the company was $2,95,884.
If Google goes ahead with the mass layoffs, it will join a growing list of tech companies that have cut their workforces in recent months, including Meta, Amazon, Microsoft and Twitter. Meta CEO Mark Zuckerberg announced earlier this month that the company would cut 13% of its workforce, or about 11,000 people.
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Since Elon Musk’s takeover, Twitter has cut more than 50% of its 7,500-strong workforce.
Ecommerce giant Amazon also is planning to fire 10,000 employees, according to a recent report by The New York Times.