Not so long ago, “the great resignation” was in full swing as millions put in their papers across the U.S. Come July, the tables are turning fast, with companies going for layoffs and pausing new headcount additions.
The latest name to join this trend is Alphabet’s Google (GOOGL). According to the Wall Street Journal, the company is slowing the pace of new talent additions for the remainder of 2022.
The Wall Street Journal reported that Google CEO Sundar Pichai informed employees in a communiqué that the company needs to be more entrepreneurial and work with more urgency, focus, and hunger than before. This would also mean “consolidating overlapping investments, streamlining processes, or pausing deployment and redeployment of resources to areas with more priority.”
Despite these challenges, Google remains a powerhouse with a focus on innovation and bringing new products to market that is unparalleled.
Wall Street continues to rally behind the stock with a Strong Buy consensus rating based on 30 unanimous Buys and an average price target of $3,090.23, which implies a potential upside of 35.51%.
The development comes fresh on the heels of Meta (META) looking to trim its workforce by identifying people who are slacking.
In another development last week, the company also proposed hiving off its advertising technology unit to fend off the Department of Justice. Google is also facing regulatory actions in Europe related to its advertising technology. Although the Department of Justice (DOJ) had earlier filed a lawsuit against Google for anti-competitive practices, it is in the midst of filing an antitrust lawsuit against the company related to its advertising technology.
Hedge Funds Bullish About GOOGL
Concurrently, hedge funds have increased holdings in the stock by 186,200 shares in the last quarter and continue to remain positive about the company. Impressively, Ric Dillon’s Diamond Hill Capital has upped its holding in the stock by nearly six times, to around $521 million.
Closing Note
The slowdown in hiring by Alphabet and other tech giants seems to be a cautionary step ahead of the looming recession and comes after a rapid hiring spree over the past few quarters.
Additionally, after a 21.4% fall in its share price so far this year, Alphabet is clearly being seen as an attractive bet looking at analysts’ stance as well as hedge fund actions about the stock.
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