Tech giants such as Alphabet’s (NASDAQ:GOOGL) Google and Microsoft (NASDAQ:MSFT) continue to implement job cuts as they streamline operations and adjust their go-to-market strategies. According to a CNBC report, Google is laying off at least 100 employees from several teams within its cloud unit. In a similar move, Microsoft is cutting hundreds of jobs in its Azure cloud division, Business Insider reported.
These job cuts are part of a broader strategy where these companies are reducing their workforce amid economic uncertainty while focusing on investing in high-growth areas such as artificial intelligence (AI).
With this context, let’s examine the recent job cuts at these companies.
Google Continues to Trim Workforce
In addition to the latest layoffs, Google announced a restructuring of its finance division in April 2024, indicating a shift towards prioritizing investments in AI technology. This restructuring plan included workforce reductions and relocations.
In a similar move, Google terminated hundreds of employees across various business units, reflecting the company’s ongoing efforts to cut costs. These cuts are in addition to the 12,000 job reductions Google announced in January 2023.
Microsoft Eliminating Jobs
Like Google, Microsoft has been reducing its workforce to focus on growth and expand margins. In January 2024, Microsoft cut 1,900 jobs, primarily from Activision-Blizzard.
Furthermore, Microsoft eliminated 10,000 jobs across its engineering and human resources divisions in January 2023.
Is Alphabet a Buy or Sell stock?
Alphabet is cutting costs and integrating AI technology into its offerings, which will likely accelerate its growth rate and keep Wall Street bullish about its prospects.
GOOGL stock sports a Strong Buy consensus rating based on 32 Buys and five Hold recommendations. GOOGL stock has already gained about 24% year-to-date. These analysts’ average price target on GOOGL stock is $197.53, implying 14.07% upside potential from current levels.
Is Microsoft a Buy or Sell Stock?
MSFT’s significant investments in AI and integration of this transformative tech into its products are significantly boosting its financials. MSFT stock is up about 10.4% year-to-date.
Wall Street is upbeat about MSFT’s prospects. MSFT has a Strong Buy consensus rating based on 32 Buys and one Hold recommendation. These analysts’ average price target of $491.90 on MSFT stock implies 18.95% upside potential from current levels.
