Layoffs hit Google: 200 jobs cut





The Internet giant announced Thursday that it plans to cut global sales and marketing positions, marking its second round of layoffs.

By Catherine Clifford, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Google said Thursday that it plans to cut "just under" 200 positions in its sales and marketing organizations around the globe, according to a posting on the company's official blog.

The Mountain View, Calif.-based Internet giant attributed the layoffs to its rapid expansion and said that it would give affected employees the opportunity to find a new job within the company.

"We did look at a number of different options but ultimately concluded that we had to restructure our organizations in order to improve our effectiveness and efficiency as a business," wrote Omid Kordestani, senior vice president of global sales and business development, in the blog post.

"We will give each person time to try and find another position at Google, as well as outplacement support, and provide severance packages for those who leave the company," Kordestani said.

Shares of Google closed up $9.22, or 2.7%, at $353.29 a share Thursday, amid a broad rally on Wall Street, but the company's stock has fallen sharply over the past year and a half. In November 2007, shares of Google climbed past $700. Even in May 2008, shares of the Internet giant were still hovering around $580 per share.

The recession has taken a toll on Google (GOOG, Fortune 500) as the global downturn cut sharply into budgets for technology and advertising. In January, Google had its first layoffs, terminating 100 recruiters made redundant because the company has dramatically reined in its hiring.

One analyst said that it was a good move for Google to reduce its headcount, and recommended that the Internet giant keep on chopping away at its staff. Google ended last year with 20,222 employees, 8,000 of them in sales and marketing.

"What you have seen today is 200 cuts. I think this is just the start. I expect another 600 people to be let go," said Trip Chowdhry, senior analyst at Global Equities Research. He expects some of the positions to go will be at a more senior level.

"When the economy is booming, they don't take a hard look at each and every employee," Chowdhry said. But when times are tight, company executives scrutinize the job performance of each staffer. "They are revaluating - they are getting rid of dead wood."

Chowdhry thinks the company's cost-cutting initiatives will be welcomed by investors because taking out excess spending improves the company's profits. But Chowdhry reiterated that the job cutting should have happened sooner.

"It is long overdue," Chowdhry said. "They should have done this two years back."





Job cuts on Main Street
Small companies account for more than 40% of the nation's payroll - and as the economy worsens, their staffing cuts reverberate through local communities.






Kristoffer Knudsen
CEO, Copenhagen Furniture
Lakewood, Colo.


I've owned my furniture business for two years now. Two months ago, I had nine employees, but sales have dropped off so significantly that we are now down to four.

We sell furniture products from Denmark and Scandinavia that are very high-end. In the past, economic dips didn't really impact my customer base, but now, even the wealthiest customers are being cautious. We're eking by and will hopefully make it through by tightening expenses and improving the bottom line any way we can. For me, it is a good feeling to provide my employees with good salaries, so letting them go is a sad state of affairs.

I have gone without a paycheck for months to salvage the business, but all the bad news in the press and the irresponsible politics going on makes it so difficult in the retail environment. I eventually hit the limit on my credit line and couldn't secure another one.

The small staff isn't just difficult because we all have to pick up more responsibilities; not long ago, our hope was to build two or three other small showrooms in locations across the city of Denver. But now, with so few people, it is impossible to expand.