Google offers buyout: Why is the tech giant paying employees to leave?

Google on Tuesday is trimming its workforce by offering buyouts to employees across several divisions. The layoffs target teams across the company’s knowledge and information (K&I) unit, central engineering units as well as marketing, research and communications teams, reported CNBC.

The “voluntary exit program” applies to the US-based employees. Some teams are also making it mandatory for remote employees who live within 50 miles of the company to come back to the office, according to the report. They will be expected to assume a hybrid work schedule “in order to bring folks more together in-person,” said the company.

Paying severance for silent exit 

“Earlier this year, some of our teams introduced a voluntary exit program with severance for the US-based Googlers, and several more are now offering the program to support our important work ahead,” Google spokesperson Courtenay Mencini wrote in an emailed statement to CNBC.

The K&I unit of Google has approximately 20,000 employees. It underwent a reorganisation in October last year which resulted in Google executive Nick Fox taking over the helm.

Fox sent out a memo on Tuesday saying that “employees who are not meeting expectations may want to take the buyout and those who are excited by their work and doing well will remain with the company”, reported CNBC.

What does Google executive’s memo say?

“I want to be very clear: If you’re excited about your work, energized by the opportunity ahead, and performing well, I really (really!) hope you don’t take this! We have ambitious plans and tons to get done,” Fox wrote, according to the memo, which was reviewed by CNBC.

“On the other hand, this VEP offers a supportive exit path for those of you who don’t feel aligned with our strategy, don’t feel energized by your work, or are having difficulty meeting the expectations of your role.” Fox added.

‘AI Infra spending’ is Google’s top priority

The buyouts come after the company’s finance chief Anat Ashkenazi in October last year said that one of her top priorities would be to drive more cost cutting as Google expands its spending on artificial intelligence infrastructure in 2025.

Google is also overhauling a popular internal learning platform to focus on teaching employees how to use modern AI tools in their work in a shift away from some of its nice-to-have programs to more business-essential offerings, as per the CNBC report.

Buyouts are new-age layoffs

Google has done multiple buyout offers in a few units this year, making it a preferred strategy to reduce employee count, marking a cultural shift from traditional layoffs.

The pivot to buyouts came after Google faced backlash for laying off 6 per cent of its workforce in January 2023. At the time, employees said their access to company systems was unexpectedly cut off. Some of them were long-time employees, stellar performers or on medical or maternity leave, CNBC reported at the time.

The full-time US-based employees of Platforms and Devices, which is the company’s hardware unit, can apply for a buyout in January. This unit consists of 25,000 full-time employees working on Android, Chrome, ChromeOS, Google Photos, Google One and the Pixel devices

People Operations, also known as the company’s human resources department, offered voluntary buyouts in February. Google’s legal and finance teams have also announced buyouts this year, a company spokesperson told CNBC.

How much severance pay can employees expect?

As part of the People Operations buyouts, mid to senior-level employees received severances of up to 14 weeks of salary and one additional week for every full year of service, said CNBC.

In his Tuesday memo, Fox said he’s been “paying close attention” to the other units’ buyout offerings. He wrote that he decided to offer buyouts after hearing positive feedback from the other units.