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Why is Google planning to fire 6 per cent of its employees?

This amounts to nearly 10,000 people


Joining the layoff bandwagon of the IT ecosystem is the search engine major Google, which may sack nearly 6 per cent of its employees, which amounts to about 10,000 people.

According to various media reports, managers at the company have been directed to identify employees who are underperforming. This is will happen from early next year. 

According to The Information, Google asked its managers to categorise six per cent of its employees as low performers. The rating will be done based on the impact of the work they do on the business. 

Managers were asked to place only two per cent of the employees in this category in the earlier review system. Under the new system, the managers will be able to place only a reduced percentage of employees in the high rating category.

The new rating would also ensure that managers are can avoid offering bonuses and stock options to Google employees who are rated poor. 

According to a report, Google's parent company Alphabet came out with the new review system after Hedge fund billionaire Christopher Hohn said the company needs to reduce the number of employees it has. He reportedly observed that employees at Google are paid better than their peers in other tech companies.

According to a US Securities and Exchange Commission report, the average salary of a Google employee is 70 per cent higher than Microsoft. A CNBCTV18 report said Alphabet offers its employees a salary that is 153 per cent higher than 20 of the biggest tech firms in the US.

However, Alphabet is yet to comment on the reports of rumoured layoffs.

A few months ago, Google CEO Sundar Pichai had said when a company has fewer resources than before, it will prioritize all the right things to be working on and the employees would be more productive.

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