Why is Google buying out its employees?

The Hindu

28-06-2025

The story so far: Google has taken action to reduce its workforce across departments, by using a mix of strategies. These measures involve announcing a voluntary exit programme for several teams based in the U.S., and mandating a hybrid work schedule for remote workers who live within 50 miles of an approved office. Other employees have also reportedly been affected by layoffs.
What is Google's employee buyout programme?
According to an internal memo shared by Business Insider, the Senior Vice President of Core Systems at Google, Jen Fitzpatrick, said the company was offering a Voluntary Exit Program (VEP) for Core Googlers in the U.S. This means that eligible Google employees, called Googlers, will be allowed to resign and also receive severance pay.
'The Voluntary Exit Program may be a fit Core Googlers who aren't feeling excited about and aligned with Core's mission and goals, or those who are having difficulty meeting the demands of their role,' said Fitzpatrick.
The buyout option was offered to employees in Google's Knowledge & Information and central engineering teams. Those in the marketing, research, and communications teams could also avail the option, per CNBC.
This is not the first time Google has offered a voluntary exit to workers; the company had proposed buyouts to eligible U.S.-based employees in its People Operations department and its Platforms and Devices group, per media reports.
Employee buyouts are a less drastic way for companies to reduce their headcount, although the exact number of departing employees is hard to predict. Because employees choose to leave, this strategy triggers less bad press than a mass layoff. It further reduces the risk of fired employees legally challenging their termination. In the case of large layoffs, U.S. companies may have to provide advance notice to the relevant labour regulators.
As noted by Fitzpatrick, employee buyouts can help filter out workers who are only keeping their jobs for financial reasons and would prefer to go elsewhere with a safety net in the form of severance pay.
In early 2023, when Google announced it was cutting around 12,000 jobs or about 6% of its workforce, it faced significant backlash.
Since then, Google has carried out smaller layoff rounds across its voice assistant units, hardware teams (Pixel/Nest/Fitbit) advertising sales team, and its AR team. Earlier this week, the live layoffs tracker Layoffs.fyi claimed that 75 Google employees were to be laid off, citing a report by The Information.
How does this impact engineers in the K&I team?
Employees in K&I, who work on Google Search, Ads, Geo, and Commerce products, were offered employee buyouts, according to the Business Insider report.
Google is investing heavily in Generative AI and rapidly infusing its offerings with AI features so that it can better compete with rivals such as OpenAI. Google's Knowledge & Information team further launched AI Overviews, Circle to Search, video understanding, 'shop what you see' in Lens, and improvements to Search functionality, according to Alphabet CEO Sundar Pichai.
However, the tech giant is facing antitrust lawsuits over its growing dominance in market sectors such as search and ad networks. Google's potential antitrust issues in the AI market have also been flagged by the U.S. Department of Justice (DOJ).
What is Google's new remote work policy?
In addition to the employee buyouts across several divisions, Google confirmed that multiple teams were asking remote employees to transition to a hybrid work schedule where they would spend three days in office. This can also serve to trigger employee resignations, with labour advocates sometimes terming this strategy as 'backdoor layoffs.'
The internal memo sent to Core Googlers cited reasons such as 'connection, collaboration, and moving quickly to innovate together,' for bringing more employees back to the office.
However, Fitzpatrick claimed that the company's intention was not to reduce the number of Core Googlers, and that it was aimed instead at internal mobility and creating growth opportunities.
Which other companies are reducing their headcount?
Apart from Google, other major tech companies that let go of employees in recent weeks include Intel and Microsoft.
Intel is planning to shut down its small automotive business and cut most workers there, according to a report from the Oregon Live/The Oregonian. Another report from the outlet cited an internal memo to claim that Intel is planning to lay off about 15% to 20% of its factory workers.
Meanwhile, Microsoft is planning major cuts in its gaming division Xbox, according to Bloomberg. Early this month, the company confirmed it would cut about 305 jobs. This came even after Microsoft laid off around 6,000 employees in May, or about 3% of its global workforce.
What other challenges is Google facing?
In the coming months, U.S. Judge Amit Mehta is expected to consider proposed remedies by the U.S. DOJ and Google itself to curb Google's status as an illegal monopoly in some search markets. The DOJ has favoured measures such as the forced divestment of Chrome and the formation of a Technical Committee to oversee Google's legal compliance. The tech giant naturally supports more lenient measures that do not significantly damage its lucrative business or its top position in the search market.
It remains to be seen whether Judge Mehta's ruling will vindicate the DOJ or Google. But as Google's AI competitors floor the accelerator, the Big Tech giant is still trying to move forward, albeit with a leaner workforce.