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.

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By Catherine Clifford, staff writer

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Small companies account for more than 40% of the nation's payroll - and as the economy worsens, their staffing cuts reverberate through local communities.
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NEW YORK ( -- 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." To top of page

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