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Google fires 200 workers in its largest layoff so far

NOT UNTOUCHABLE The Internet’s most profitable company said that it had hired too many redundant employees in its boom years and had to adjust

AP , SAN FRANCISCO

The Google logo is displayed inside Google headquarters in Mountain View, California, on Oct. 27 last year. Google announced on Thursday that it would lay off 200 workers as the recession squeezes the Internet’s most profitable company.

PHOTO: AP

Google Inc is jettisoning nearly 200 workers in its largest round of layoffs yet, demonstrating that even highly profitable companies are feeling the recession’s pinch.

The job cuts announced on Thursday affected less than 1 percent of the 20,200 workers employed by the Internet search leader.

That’s modest compared with the massive shake-ups in the newspaper, retailing, automobile and financial services industries during the past year.

Google’s housecleaning nevertheless is a sobering sign of the hard times around the globe.

Coming off a year in which it earned US$4.2 billion on revenue of US$22 billion, Google is still trimming its expenses in an attempt to protect its profit margins and prevent its slumping stock price from falling even further.

Google’s fortunes are tied to ad spending that is dwindling as both marketers and consumers squirrel away more cash. Although Google’s revenue has continued to rise during the 15-month-old recession, some analysts say they believe the Mountain View-based company may finally be suffering its first quarter-to-quarter decline since it went public in 2004.

It’s a guessing game because Google steadfastly refuses to offer financial guidance. But Google’s recent actions have left little doubt that management is bracing for a possible downturn.

Once renowned for its free-spending ways, Google already has curtailed some employee perquisites, dumped outside contractors and closed services that aren’t paying off. Pulling the plug on a radio advertising division in last month eliminated as many as 40 jobs.

Management has also clamped down on hiring after adding more than 17,000 workers in Google’s first 4 years as a public company. That decision prompted Google to dump 100 employee recruiters in January.

The latest layoffs are concentrated in the division that sells Google’s advertising.

In a blog posting, Google said it had hired too many employees doing the same jobs during its rapid expansion.

“Making changes of this kind is never easy — and we recognize that the recession makes the timing even more difficult for the Googlers concerned,” wrote Omid Kordestani, the company’s senior vice president of global sales and business development.

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