Google and Amazon Struggle to Lay Off Workers in Europe | Tech News

Google and Amazon Struggle to Lay Off Workers in Europe

After announcing the largest rounds of layoffs in their history, US big tech companies are now learning how difficult it is to reduce headcount in Europe.

By:BLOOMBERG
| Updated on: Apr 07 2023, 07:40 IST
Google layoff
In Europe, mass layoffs among tech companies have stalled because of labor protections that make it virtually impossible to dismiss people in some countries without prior consultations with employee interest groups. (REUTERS)

After announcing the largest rounds of layoffs in their history, US big tech companies are now learning how difficult it is to reduce headcount in Europe.

In the US, companies can announce widespread job cuts and let go of hundreds if not thousands of workers within months — and many have. Meanwhile, in Europe, mass layoffs among tech companies have stalled because of labor protections that make it virtually impossible to dismiss people in some countries without prior consultations with employee interest groups.

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This has left thousands of tech workers in limbo, unsure about whether they'll be affected by negotiations that can drag on indefinitely.

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In France, Google parent Alphabet Inc. is currently in talks to reduce headcount through voluntary departures, offering severance packages that it hopes are generous enough to get workers to leave, people familiar with the matter said, asking not to be identified because the information isn't public. Amazon has tried to get some senior managers there to resign by dangling as much as one year's pay and has granted leave to departing employees so their shares can vest and be paid out as bonuses, one person with knowledge of the situation said.

Both in France and Germany, where labor laws are among the strongest in the EU, Google is currently in negotiations with works councils — company-specific groups whose elected employee representatives negotiate with management about workforce issues, according to a person familiar with the matter. By law, companies are required to bargain with these councils before implementing layoffs — a sometimes lengthy process that includes information gathering, negotiations and the possibility of recourse.

Because of these requirements, the person said, Google branches in Germany and France will be some of the last locations to be affected by the cuts, if even at all.

When reached for comment, Google acknowledged the negotiations, and added that it was not planning on implementing layoffs in Romania, Greece or Austria.

“We have been working carefully and individually through each country where reductions are taking place to fully adhere to local legal requirements, which vary per location, are complex, and take time,” a Google spokesperson said in response to questions from Bloomberg.

In Paris, where Google has around 1,600 employees, a works council is in talks with the company over how many employees — and what types — will be included in a voluntary collective departure plan. People familiar with the process say a resolution could still be weeks away, and in the meantime, things will continue as usual. According to an employee who requested anonymity, management made it clear that nobody would be forced out.

By contrast, in the UK, where labor protections are not as stringent, an estimated 500 out of 8,000 Googlers will have to leave, according to Unite the Union representative Matthew Waley — a 6% redundancy rate consistent with the firm's global target. Talks with the works council will result in confidential severance packages, but the number of departures is not up for negotiation. “They are trying to do the legal minimum,” Waley said, referring to the ongoing bargaining process.

The same is true in Dublin, where unions claim that Google is planning to oust 240 employees, and in Zurich, where unions said the number of layoffs affects more than 200 people.

Employees recently set up a cross-country Google works council for EU countries, which includes the UK and Switzerland. It is expected to be operational in about six months, and will be a powerful collective voice in future consultations. According to Waley, this represents “a big change,” as the company will have to give employees much more advance notice of reorganizations. This European Works Council will be comprised of representatives who are Google employees and will serve for a four-year term. Council members will liaise with Google management, and be headquartered in Dublin, documents show.

While the different standards of treatment have not created friction among Google employees spread around the world, “people have realized the way things happen in the US versus France and Germany” are different, says Parul Koul, executive chair of the Alphabet Workers Union and a software engineer at Google based in New York.

“It is inspiring for people in the US to see things are different in other places – it's a blueprint for what people can fight for,” they added.

Job cuts aren't just affecting tech workers. Between October and March, executives around the world cut about half a million employees around the world, according to a review by Bloomberg News. Still, reductions in the tech industry have been particularly severe after many companies admitted to expanding too aggressively after seeing a surge in traffic during Covid-19 lockdowns. Once schools, offices and shops began to reopen, growth in web-based services from social media use to food delivery apps slowed dramatically, forcing executives to reevaluation their outlooks.

More than 170,000 full-time tech workers are employed on the continent and in the UK by Amazon, Alphabet and Meta, with software engineers often earning salaries that are half as much as their counterparts in the US.

At Amazon France, with about 1,500 office employees in Paris, some senior managers with between 5 and 8 years of experience were offered up to a year's pay to leave, according to a person familiar. The person said that departing employees were allowed to stay on so-called “gardening leave” until May, when Amazon shares vest and are paid out as bonuses.

In previous years, employees were offered less than a month of compensation per year worked, one of the people said.

At Amazon's German arm, a person familiar said that the company has started laying off people still in their probationary periods, and offering proposals for voluntary departures.

In Luxembourg, according to a person familiar, exiting Amazon employees have been offered a month's salary per year of service, with extra pay determined by national laws. Layoff offers began the middle of last month, the person added, and people will depart on either April 1 or June 1 depending on whether they've opted into a two-month window to search for a job internally.

An Amazon spokesperson declined to comment on specific cases. Amazon's CEO Andy Jassy said in January that the company would be communicating with impacted employees, or where applicable, with employee representative bodies.

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First Published Date: 07 Apr, 07:39 IST
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