The company’s new performance management system could help managers fire thousands of its underperforming employees from early next year, The Information reported last week.
Under the new system, managers have reportedly been asked to categorise six per cent of Alphabet’s workforce – corresponding to about 10,000 employees – as poor performers.
This system may also reduce the number of incentives and stock awards given to employees.
The company has faced several challenges this year, from the impacts of the pandemic to rampant inflation.
Alphabet showed a 27 per cent drop in profits in its third quarter compared to last year, with weaker-than-expected earnings and revenue.
“It’s clear we are facing a challenging macro environment with more uncertainty ahead,” Google chief Sundar Pichai said in July.
He has been urging employees over the previous months to improve productivity.
“Look, I hope all of you are reading the news, externally. The fact that you know, we are being a bit more responsible through one of the toughest macroeconomic conditions underway in the past decade, I think it’s important that as a company, we pull together to get through moments like this,” he said in a meeting with employees.
Earlier this year, he introduced an effort called “Simplicity Sprint” as a response to concerns that the company’s productivity “as a whole is not where it needs to be for the head-count we have”.
In July, he called on employees in an internal memo to be “more entrepreneurial” and show “greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days”.
Google did not immediately respond to The Independent’s request for comment.
Many tech companies headquartered in the US have been laying off employees this year to save costs.
The company notified regional authorities in California last week that it would lay off about 260 workers at various facilities employing data scientists, software engineers and other corporate workers, with these job cuts effectively beginning on 17 January next year.
“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4m (£3.5m) a day. Everyone exited was offered three months of severance, which is 50 per cent more than legally required,” Mr Musk said.