Google Hunkers Down: Lays Off Recruiters and Possibly Engineers, Cuts Projects

Posted by: Rob Hof on January 14, 2009

Even Google gets the blues. In what might be seen as its first “real” layoffs, Google is cutting about 100 recruiting jobs, though some of those people may find other jobs.

This actually isn’t its first layoff, since it cut some people after its DoubleClick acquisition last March, but that was people not originally hired by Google. And it cut some thousands of contractors and temporary workers in recent weeks.

Since Google has explicitly said it’s reducing hiring, it makes sense that it wouldn’t need as many recruiters. And it says it’s still hiring more slowly in other areas, though Google also said today that it’s closing offices in Austin, Trondheim, Norway, and Lulea, Sweden and may not be able to save all 70 engineering jobs there.

Google says those closings are not part of cost-cutting, and that appears to be true; in an interview I did with Eric Schmidt last March, he was already mentioning that one of Google’s biggest challenges was the difficulty of communications among many small, farflung offices around the world. But clearly the slowing economy offers a good excuse to make a move.

That’s not all. In quick succession today, Google also announced cuts in a number of projectsprobably wise, notes Search Engine Land’s Danny Sullivan, since nearly all of which had failed to take off. Google has not announced separate layoffs as a result of these moves, so presumably folks on the projects are getting redeployed elsewhere.

On the chopping block are Dodgeball, a mobile social networking service, and Mashup Editor, a way to create new Web applications using various pieces of Google services that was in a private test. It’s also shuttering the Twitterlike microblogging service Jaiku, Google Catalog Search, and Google Notebook. And it’s no longer going to allow uploads to Google Video, in favor of the much more popular YouTube and video on its Picasa Web Albums.

None of these cutbacks is particularly surprising, given that Google’s got a lot of other irons in the fire and clearly wants to avoid spending on products that aren’t going anywhere. Indeed, it’s a sign that the company, which hired a new chief financial officer last year, is taking decisive steps to cut costs in the face of an economy that’s screeching to a halt.

Analysts have been bringing down fourth-quarter and 2009 revenue and profit estimates for Google thanks to signs that the economy is hitting online advertising harder. So far, those estimate cuts are mild because it appears that Google’s search ads, which are more measurable than other kinds of ads, have been holding up better.

Still, all these moves are a sign that in this deep recession, even one of the world’s most successful companies is mortal. It seems likely that even if Google fares better than most, as appears likely, it won’t be completely spared from the worst economic troubles in many years.

Reader Comments

GloomBoom.com

January 15, 2009 3:14 PM

Google is vulnerable because it relies on advertising for revenue. That is one area of the economy that will wither this year and next so don't look for growth for a while.

David Smith

January 15, 2009 3:50 PM

It would seem that if one of the fastest growing tech companies is laying off recruiters one has to wonder how other tech companies are doing. It seems that the economy is going down each day! The government needs to step it up!

Devon Lambert

January 15, 2009 4:02 PM

I would argue that although traditional advertising mediums (TV, Print, and traditional Media) advertising will continue to diminish, advertising as a medium online will show growth or remain stagnant. True, brick and mortar businesses that typically turned to Google for advertising may collapse in these hard times and thus cut into the big G's revenue streams, don't forget about the new innovators who will likely rise to the occasion in this slumping economy and re-fuel that money right back into Google's pockets. Google is smarter than most with their investments and ventures. I for one would not count them out just yet.

Free Games

JB

January 15, 2009 4:53 PM

For all investors who easily succumb to uncertainty and or are having trouble being optimistic during this onslaught of negative news: I highly recommend this newsletter containing a sound and enlightening analysis (something that is quite difficult to find on businessweek):

http://www.schwabinsights.com/2009_01/strategy.html

techy

January 15, 2009 5:50 PM

They are shutting down Google Notebook, Video, Catalog Search, and Dodgeball. Jaiku is going open source, but it's not clear if Google will continue to host it.

Source:Tech News

Mike Reardon

January 15, 2009 6:04 PM

A point that needs to be looked at by the large players still on the web, the dot-com bust had a lot of great stuff become dust in the crash. Don’t let the good stuff fail in this downturn. Buy up what is good to keep it alive and develop what makes real money.

YouTube was a good buy for Google, even if its not a giving great returns yet, because it is the center of the video web.

And an idea I think this was a Google Suggest but its a great idea.

Google maps finds the store you want for you and can show you how to drive or walk direct to the store, now Google phone needs to empower Google Checkout to replace bank debit cards and make purchases in the store. And Google can ask for a little extra for the direct connection and the sale.

That’s the stuff they should expand on in a downturn. And if they can get some Infrastructure money on the innovation it would be a good idea to help Google's income and also retail.

Dominic

January 15, 2009 8:38 PM

Google is feeling the pinch as we all are. I have a AuctionBusiness site that's feeling the slow down too.

Strategery

January 15, 2009 11:10 PM

I think Google is going the way of Yahoo--too many services and too much overhead that requires a large revenue stream. Google needs to get back to its core business--create the best search engine, with relevant results. Unfortunately, their search results are disappointing lately; there are plenty of irrelevant results, broken links, moved pages and top results that are clearly a conflict of interest.

tiddle

January 15, 2009 11:42 PM

To Mike Reardon: The question of whether YouTube is a good buy for GOOG depending on what you want out of the deal. Sure, if you want to provide free community service or open source stuffs so that tons of people will come to you, YouTube is achieving that purpose. But as a commercial entity, for GOOG to acquire/start in more projects than hands of the Hindu god, yet still failing to diversify its revenue source for so long, that result is at once dismal and pathetic.

tiddle

January 15, 2009 11:42 PM

To Mike Reardon: The question of whether YouTube is a good buy for GOOG depending on what you want out of the deal. Sure, if you want to provide free community service or open source stuffs so that tons of people will come to you, YouTube is achieving that purpose. But as a commercial entity, for GOOG to acquire/start in more projects than hands of the Hindu god, yet still failing to diversify its revenue source for so long, that result is at once dismal and pathetic.

TiddleToddle

January 23, 2009 6:26 AM

To Tiddle: Hands of Hindu God may still be less than your college girlfriends. Even in the age of Google, its unfortunate that some people still want to turn the discussion into their personal racial comments.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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