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Big Tech Layoffs: Jack Dorsey Defends Elon Musk Job Cuts as Sundar Pichai Outlines Google’s Strategy

Published May 10, 2024 3:37 PM
James Morales
Published May 10, 2024 3:37 PM

Key Takeaways

  • Jack Dorsey has said that Twitter “had too many employees” when he ran it.
  • Meanwhile, CEO Sundar Pichai has commented on the company’s approach to layoffs.
  • Despite indicating that Google layoffs are coming to an end, Sindai has had to defend against criticism from employees.

For companies of a certain size, periodic workforce reductions can help to lower expenditure and, some argue, accelerate innovation.

In recent interviews, Twitter founder Jack Dorsey and Google CEO Sundar Pichai both weighed in on the nature of layoffs in the technology sector, depicting them as an inevitable part of business.

Jack Dorsey Comments on X Layoffs

When Elon Musk took Twitter (now X) private in 2022, he set about firing over half of the company’s employees, transforming the firm’s operations into something more akin to a lean startup than the large corporation it was under Dorsey.

Commenting on his time as CEO, Dorsey recently admitted that “we definitely had too many people.” However, he explained that the public Twitter was a different animal to the privately-owned X we know today.

Noting that over 50 to 60% of Twitter employees worked in sales, he pointed out that the company made a lot more money back then than it does now under Musk’s leadership.

“It all goes down to incentives,” Dorsey observed. “The incentives were profit and making numbers for the quarter. So [sales staff] were doing all the right things for the situation they were in.”

But now, freed from the need to please shareholders, X has taken a different path – one that has involved multiple rounds of drastic layoffs. 

In contrast, Pichai’s approach to reducing Google’s headcount emphasizes subtlety and moderation.

Google’s Slow and Steady Layoffs 

Alphabet has been reducing its global workforce since early last year, when it announced plans to eliminate about 12,000 jobs.

Commenting  on the decision to reduce numbers gradually, Pichai said Google has “taken the time to do it correctly,” and where possible, has reallocated employees to focus on business priorities like AI. “So that’s why we’ve taken the time to do it correctly and well,” he stressed.

Alphabet Low Morale

While Pichai may emphasize restraint, there are signs that dissent is brewing among rank-and-file employees.

At an all-hands meeting last week, staff asked  “when can we expect an end to the uncertainty and disruption that layoffs create?” Pichai responded that the majority of layoffs will be finalized in the first half of 2024. But job security isn’t employees’ only concern.

“We’ve noticed a significant decline in morale, increased distrust and a disconnect between leadership and the workforce,” a comment posted on an internal forum ahead of the meeting observed. 

Beholden to shareholders, Pichai doesn’t have the same freedom Musk has to make decisions that hurt profitability

Like any large technology business, Alphabet must balance short-term profits with more long-term goals that require investing in research and development. Get that balance wrong and a company that has always been known for innovation could quickly lose its edge.

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