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Google Parent Company To 'Significantly' Limit New Hiring In 2020, CEO Pichai Says

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Google Parent Company To 'Significantly' Limit New Hiring In 2020, CEO Pichai Says

Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG) will "significantly slow down the pace of hiring" for the rest of 2020 in light of the novel coronavirus (COVID-19) pandemic, the company's chief executive officer Sundar Pichai told employees in an internal email, as reported by Bloomberg.

What Happened

Pichai said that the Google parent company had added around 20,000 employees last year, and was aiming at a similar number this year, according to the memo shared by Bloomberg.

Instead, the company has only hired 4,000 workers so far this year, and "thousands" of new hires will be onboarded soon, Pichai told the employees.

The Alphabet CEO added that the company is facing challenges in onboarding the new hires, including arranging essential equipment like "laptops" and "security keys," and getting them "trained and productive on their new teams."

According to Pichai, the company will limit any new hiring to a "small number of strategic areas where users and businesses rely on Google for ongoing support."

" We couldn't have imagined then how much could change, and how quickly, for so many people around the world," the 47-year old said, per Bloomberg.

"We're only a quarter of the way through 2020, and it's already been the most unusual year in memory."

Why It Matters

Alphabet's business has been severely impacted by the coronavirus crisis, as a significant portion of the company's revenue comes from advertisements alone.

With a majority of businesses across the United States and the globe, being temporarily shut down due to the pandemic, the demand for ad placements has been significantly lower.

Pointing out that Google and Alphabet aren't immune to the coronavirus pandemic impact, Pichai said, "[we] exist in an ecosystem of partnerships and interconnected businesses, many of whom are feeling significant pain."

Alphabet has asked all of its employees in the U.S. to work from home during the pandemic unless their jobs absolutely require them to present in the office.

The internet company has said it will provide full-time pay to contract employees, based on the hours they used to work before the pandemic, irrespective of the hours they're required to work now, but it isn't clear if the support is for an indefinite time as the pandemic shows no immediate sign of slowing down.

Price Action

Alphabet Class A shares closed 0.6% lower at $1,257.30 on Wednesday and traded another 1% lower in the after-hours session at $1,245.02.

Class C shares closed 0.53% lower at $1,262.47 and tanked another 0.8% in the after-hours at $1,252.70.

Photo Credit: Maurizio Pesce via Wikimedia.

 

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