Google announced on July 20 that it was taking a two-week hiring freeze for the next few weeks “to enable teams to prioritize their roles and hiring plans for the rest of the year,” TechCrunch reported.
This decision comes at a time when experts claim most companies are experiencing a labor shortage due to the Great Resignation and are seeking workers. So why would Google pull back? It’s all about advertising. As inflation continues to be high, advertising is down. Consumer spending is slowing, meaning companies are pulling in less and thus have less money to spend on advertising. Google noticed the trend relatively fast and acted just as fast.
Using its own data along with hearing the insider buzz, Google sees where advertisers are pulling back their budgets. Google has an advantage also with their service Google Pay, which allows them to track spending.
According to an internal memo by CEO Sundar Pichai obtained by The Verge, Google told employees that it’ll be “slowing down the pace of hiring for the rest of the year,”
Pichai stated the company will have to “be more entrepreneurial” and work with “greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days.”
The memo also noted that the company isn’t freezing hiring entirely; it’ll still hire for “engineering, technical and other critical roles.”
Alphabet, the parent company of Google, has a total of almost 135,000 full-time staff.
“Don’t listen to the politicians and the MSM, listen to the people who “see everything” and have big skin in the game,” Jamarlin Martin, CEO of Moguldom Nation tweeted.
So despite what politicians and mainstream media are saying, experts say a recession is on the way. One indicator is digital advertising–and Google took quick note of the decline.
A decline in local advertising has been for years an early warning sign of an upcoming recession as local ad sales tend to decline as much as a year in advance of national ad sales, Forbes reported. Since online platforms such as Google rely heavily on advertising, a drop would immediately affect their bottom line.
Even media investment company GroupM mid-year advertising forecast shows a slowing in ad sales. The global mid-year forecast expects 8.4 percent growth in global ad spend this year but the projection is below its December estimate, which put growth at 9.7 percent. In the U.S., Ad Week reported.