Google Cuts Marketing budget Up To Half, Hiring May Freeze

Google Marketing Cut Up to half, Hiring maybe freeze

Sundar Pichai

Google Cuts Marketing budget Up to half, Hiring maybe freeze

In the morning of April 24, according to CNBC reports, an internal Google material shows that the company will cut the marketing budget in the second half of the year by up to half.

Sundar Pichai (Profile Picture On Twitter)

Google Marketing staff received this email this week about budget compression. The emails show that Google is not only making budget cuts, but also launching a new hiring freeze for full-time employees and contract workers.

“There are budget cuts and hiring freezes happening across marketing and across Google.” A Google global director wrote in an email to employees on Wednesday, “We, along with the rest of marketing, have been asked to cut our budget by about half for H2.”

A spokesperson for the company confirmed that budgets in some areas will be cut by up to half. But the spokesperson also added that other departments may not have to as the adjustment process is still underway.

“As we outlined last week, we are re-evaluating the pace of our investment plans for the remainder of 2020 and will focus on a select number of important marketing efforts,” a company spokesperson said in an emailed statement to CNBC Thursday. “We continue to have a robust marketing budget, particularly in digital, in many business areas.”

After the news broke, Google shares fell nearly 2 percent after hours on Thursday.

The radical move comes a week after Sundar Pichai, CEO of Google’s parent company Alphabe, said Google will shrink some investments for the rest of the year, starting with hiring. But Pieters only said at the time that the “non-core marketing budget” would be reassessed and hiring would be “significantly slowed”, not that there would be such a drastic budget cut and hiring freeze.

“Beyond hiring, we continue to invest, but will be recalibrating the focus and pace of our investments in areas like data centers and machines, and non business essential marketing and travel.” Sundar Pichai said in an note sent to employees last week.

Here is How Apple and Google Fight Against COVID-19 with Their Partnership – Related Reading.

The news also comes at a time when the new crown epidemic is hitting the global economy. Last week it was reported that the company began to shrink its skills training resources for many of its employees. It’s worth noting that Alphabet will release its second-quarter results next Tuesday.

A Google spokesperson said that the company did not conduct a massive hiring freeze, but did not comment on why the global director who sent the email above received the information.

“We’ll be slowing down the pace of hiring, while maintaining momentum in a small number of strategic areas, and onboarding the many people who’ve been hired but haven’t started yet.” The spokesman said in a statement.

Before the new crown outbreak, Google had planned to increase its marketing spending over last year’s level. The annual report shows that Google spent $18.46 billion on sales and marketing in 2019.

This includes advertising and promotional expenses related to products and services, as well as employee compensation in the sales and marketing departments. The company increased its workforce by at least 15 percent last year. In addition, advertising and promotion costs increased by $402 million.

“Just like the 2008 financial crisis, the entire global economy is hurting, and Google and Alphabet are not immune to the effects of this global pandemic,” CEO Sundar Pichai stated in the memo sent to employees last week. “We exist in an ecosystem of partnerships and interconnected businesses, many of whom are feeling significant pain.”

Source – CNBC

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