News Bits: More Layoffs at Google?

Written by Erin Barker

Friday, January 23. 2009 at 11:55 AM EST Post a comment

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Google (Nasdaq: GOOG) yesterday reported a 68 percent fall in fourth-quarter profit... leading some to suspect that significant layoffs are on the horizon.

Profit was affected largely by a $1.1 billion impairment charge on its investments in Time Warner Inc.'s AOL unit and wireless company Clearwire Corp., and the search giant is actually holding up better than others due to the enduring strength of Internet advertising, The Wall Street Journal reports.

And the company has been cutting spending: Google faced its first-ever real layoffs last week when it cut 100 full-time recruiters, and it reported that it hired only 99 employees in the fourth quarter -- about a ninth of the 889 it hired in the same period last year.

However, Google CFO Patrick Pitchette broadly hinted at more cuts on yesterday's earnings call, saying "We really have a cost structure that is labor intensive, and we have a lot of flexibility in our model. We're going to manage our company responsibility in that sense."

The potential cuts are rumored to include, among others, as much as 5 percent of the company's engineering staff.

Google wouldn't be the first tech giant to face widespread layoffs this month -- Microsoft Corp. (Nasdaq: MSFT) yesterday said it would cut 5,000 jobs.

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