Google Allocates $700 Million for Severance Packages to Former Employees

Last year, Google undertook significant personnel reductions, resulting in a multi-billion-dollar expenditure on severance packages. The tech giant is now poised to pay over $700 million to former employees as it addresses costs associated with these job cuts.

Severance Payouts in Detail

Alphabet, the parent company of Google, highlighted in its fourth-quarter earnings report for the fiscal year 2023 that they are set to distribute severance payments totaling $700 million in the current quarter. These payouts come in the wake of both past and recent layoffs at Google, including a January 2024 round that affected core engineering and hardware teams.

The layoffs in January 2023 were particularly substantial, with Google releasing 12,000 employees, amounting to 6% of its workforce. During this period, Business Insider reported that Google recorded employee severance and related charges of $2.1 billion. All laid-off employees received pay throughout the mandatory 60-day WARN notification period, alongside a severance package of at least 16 weeks' salary, an addition of two weeks for every year of service at Google.

CEO Sundar Pichai addressed the layoffs in a memo to the staff, explaining that the company had scaled up hiring during times of rapid growth, but the present economic conditions necessitated a scaling back.

Impacted former employees also benefited from accelerated vesting of restricted stock units, bonuses, and compensation for unused vacation days. Despite the layoffs, Google reported a healthy revenue increase, with the fourth quarter bringing in $86.3 billion, up by 13% year-over-year, and an overall annual revenue of $307.4 billion, marking a 9% increase from the previous year.

Google, Severance, Layoffs