Google layoffs and its impact on the Zurich tech job market

Coffee
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Google is laying off 6% of its workforce.

Google is a huge employer in Zurich. According to Google expands presence in Zurich - SWI swissinfo.ch, there were ~5000 Googlers in Zurich in 2021, I guess probably more now given that the company apparently had such a hiring spree since the start of the pandemic.

Assuming that 6% of 5000 = 300 will be laid off in Zurich over the coming days/weeks/months, what impact could this have on the job market in Zurich?

Like probably most people in this forum, I have never lived through layoffs in the tech industry and so I am unsure how this may affect things. A couple of ideas:

  • Reduction in compensation in top-tier tech companies due to oversupply of talent?
  • Boon for startups / smaller companies, that previously could not pay enough to get top talent?

I’m curious whether others here have any interesting perspectives, particularly people working at smaller tech companies & startups or people at any of the other American tech megacorps with a presence in Zurich.

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I’d add a 3rd option:

  • Strengthening of the tech departments of larger non-primarily-tech companies, who can still pay a solid buck (e.g. financial industry)

But I still don’t believe they can easily match what Google has been paying.

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I work in pharma, an industry that is no stranger to mass layoffs.

Some generic and not industry-specific thoughts based on what I’ve seen:

  • Especially expats will simply leave town. A cultural and fiscal change for the city.
  • The company culture will change. Because of this, good people who are less motivated by money will also leave on their own.
  • Good people who absolutely want or need a big salary might find another position in the company. They might not be really happy about it, living in fear of being hit by future layoff waves and/or simply not liking their new job and/or the new company culture.
  • Good people who seek a better work environment at the expense of a lower salary will quickly be hired by other companies, also in other industries. There are ex-bankers in pharma who do similar things, just in a different context, like risk managers for example.

A question from my side, albeit somewhat off topic: Why was there a hiring spree during covid in the first place?

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The layoffs and hiring spree only really happens at Tech companies who of course profited from WFH and companies forcing to be “more digital”. Most of those (big) tech companies had to readjust their projected annual revenue growth for the next 5 years (e.g. salesforce went from 30% to 15%). However you hire the people required for that growth in advance. Now they simply have too many people. Also money was cheap and VC’s pured into highly speculative startups. That is basically almost over now…

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Does anyone know if there will be any layoffs in Switzerland? On LinkedIn I saw some people posting that they already got the message (not from Switzerland), so I’m interested if Swiss location will be hit and which kind of jobs are going to disappear. I still see some job postings for technical positions at Google Zurich…

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Layoffs work differently in Europe, this most likely will take weeks/months before anything will be known.

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If they layoff more than a certain number of people they’ll need a social plan.

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Exactly, though I suspect if they decide to make it perf based (raise/enforce the performance bar more strictly) they could get away without one.

https://www.fedlex.admin.ch/eli/cc/27/317_321_377/en#art_335_d

(but don’t think the folks in the US making decision would go for that)

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My employer (a US public remote-first tech company) supposedly uses local market data for comp targets and from Jan’23 to Jul’23 the target for my position went down ~7%.