Google May Lay Off up to 10000 Workers

Google has been quietly laying off staff and up to 10,000 jobs could be on the chopping block according to sources. Since August, hundreds of employees have been laid off and there are reports that about 500 of them were recruiters for Google.

By law, Google is required to report layoffs publicly and with the SEC however, Google has managed to get around the legal requirement. In fact, one of the ways Google was able to meet Wall Street’s Q3 earnings expectations was by trimming “operational” expenses.

Google reports to the SEC that it has 20,123 employees but in reality it has 30,000. Why the discrepancy? Google classifies 10,000 of the employees as temporary operational expenses or “workers”. Google co-founder Sergey Brin said, “There is no question that the number (of workers) is too high”.

The classification affords Google several advantages such as:

1) Hire full time employees without full time benefits. The classification enables Google to pay them above minimum wage, provide no health benefits, no insurance coverage, no stock options, and no offer of permanent employment.

2) By under-reporting actual employee headcount, Google looks good to Wall Street. A low headcount gives the illusion that productivity per employee is more than it actually is, which in turn looks good in the eyes of Google shareholders which is ultimately good for Google’s stock in the short term.

So, how does Google get around the SEC requirement regarding material information? Google has hundreds of lawyers figuring out how not to get caught. One of them is by moving workers from job to job every few months so that their status remains temporary. That is why you probably have never spoken to the same person twice at Google and that is also why there is somebody new on the job and most times you know more about their job than they do.

A bulk of the workers have been there for up to five years and many know others who had been there for seven years or more moving from job to job.

There is no question the economic downturn is hitting Google hard and with the slowdown in online advertising, their troubles are just beginning.