Alphabet, the parent company of Google, has revealed plans to lay off 12,000 employees, which amounts to 6% of its total global workforce. This decision follows a similar move by rival tech firm Microsoft, which also announced plans to lay off 10,000 employees.

Alphabet CEO Sundar Pichai stated in a memo that he is confident in the opportunity ahead for the company due to the strength of its mission, the value of its products and services, and early investments in artificial intelligence.

Google has announced plans to cut jobs globally and across the company as part of a larger trend among tech giants to scale back operations due to a struggling global economy and rising inflation.

The CEO Sundar Pichai has taken the responsibility for the decision of layoffs, he communicated this in an email to the employees. He emphasized the need to focus, re-evaluate costs, and direct resources towards the company’s highest priorities, according to a Bloomberg report.

In addition to laying off employees, Google is also providing a severance package that includes 16 weeks of salary plus an additional 2 weeks for each year of employment at the company. They will also be accelerating at least 16 weeks of GSU vesting.

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Those who are impacted by the layoffs will also receive 2022 bonuses, unused vacation time, 6 months of healthcare coverage, job placement assistance, and support for immigration. Outside of the US, the company will provide support to employees in accordance with local practices.

The decision to lay off employees comes shortly after the news that Google has delayed a part of the year-end bonuses of its workers as part of the implementation of a new performance assessment system.

Google announced that it will be paying eligible employees an 80% advance bonus initially and the remaining in the following months, according to a company spokesperson. The decision was communicated to staff last year.

In October, the company’s earnings and revenue failed to meet analysts expectations, with a 27% decline in profit to $13.9 billion compared to the previous year.

At that time, CEO Sundar Pichai stated that the company would be reducing its expenses and the CFO, Ruth Porat, added that the number of new jobs would be reduced by over half in the fourth quarter compared to the previous period.