Mountain View, California — Google Inc., owner of the world’s most popular Internet search engine, on Thursday that it plans to jettison nearly 200 marketing and sales jobs from its international operations in its largest round of layoffs yet, as the economic downturn demoralizing the revenue growth, showing that even highly profitable companies are feeling the recession’s pinch.
Google yesterday initiated its first mainstream job cuts in its more than 10-year history, announcing the loss of 200 sales and marketing positions as it attempts to cope with the economic downturn and the aftermath of years of rapid growth.
The cuts will affect workers globally, Google said in a blog posting today. Employees will have the opportunity to search for another positions within the company. There are no plans for further cuts, spokesman Matt Furman said.
“When companies grow that quickly it is almost impossible to get everything right — and we certainly did not,” said Omid Kordestani, Google senior VP for global sales and business development in a blog posting on Thursday. “In some areas we have created overlapping organizations which not only duplicate effort but also complicate the decision-making process.”
Google is attempting to curb costs as businesses reduce their spending on online advertising, its main revenue source. The company announced plans in January to cut about 100 recruiting jobs, followed in February by the closure of its radio-programming business, eliminating as many as 40 jobs. The latest cuts will help Google simplify decision making, after years of expansion created bureaucracy, Furman said.
“It was getting tough to get things done quickly and efficiently,” Furman said. “At the same time, we were over-invested in some areas. Those investments were based on assumptions about economic growth that made sense at the time, but it does not anymore.”
The job cuts announced Thursday affected less than 1 percent of the 20,200 workers employed by the Internet’s search leader.
That is quite meager compared with the massive shake-ups in the newspaper, retailing, automobile and financial services industries during the past year.
“Google’s growing financial and operational discipline should be positive for revenue growth and margins,” Youssef Squali, an analyst with Jefferies & Co. in New York, said today in a research note prior to the job-cut announcement. “We are encouraged by the company’s newfound ‘religion.’”
Google’s spring-cleaning nevertheless is a sobering sign of the hard times around the globe.
Google, based in Mountain View, California, climbed $9.22, or 2.7%, to $353.29 today on the Nasdaq Stock Market. The stock has climbed 15% this year.
Chief Financial Officer Patrick Pichette said last month the company had trimmed spending by avoiding luxuries such as business-class flights. Still, Google will continue to offer some of its famous perks, such as free meals, because they foster good communication among employees, he said.