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 projects—probably 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.