Google (NASDAQ: GOOGL) is the latest tech company to pull back on hiring new employees or trimming staff altogether. In an email dated July 12, Sundar Pichai, Chief Executive Officer (CEO) told employees that the company will be pausing developments and re-deploying assets to high-priority areas.
Pichai also claimed that Google is “not immune to economic headwinds”, so the slow down in hiring seems only logical. This move comes as the tech giant added roughly 10,000 new employees during the second quarter of 2022, with more possibly coming on board to start this quarter.
Other tech companies were earlier to the “new hires cutting” party as rising interest rates and recession risks increased; the tech companies performed their ‘adjustments’ to the workforce or simply scaled back the plans for adding new employees.
GOOGL chart and analysis
GOOGL shares are well off from their historic 5-year high price to earnings (P/E) ratio of 64.82, with the current P/E at ‘just’ 20.78. Yet, it would be difficult to characterize the shares as cheap, though they have declined over 21% year-to-date (YTD).
In the last trading session, the price closed at $2,296.99, with potential support zones between $2,242.21 and $2,274.16 levels, while the range of likely resistance levels could be between $2,387.07 and $2,403.07.
Moreover, analysts rate the shares a strong buy, with the average price prediction in the next 12 months at $3,090.23, 35.51% higher than the current trading price of $2,280.41.
As investors await the latest figures on retail inflation, it only makes sense that tech companies are hunkering down and slowing employment until they see how far inflation and rates will go.
Focusing on critical roles might help Google drive focus and creativity, which, in turn, can help the company grow and shareholders prosper.
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