Alphabet Stock News: GOOG jumps on layoffs affecting 6% of search giant's workforce
- Alphabet will lay off about 12,000 employees.
- GOOG stock has benefited from the news on Friday.
- Alphabet will focus on AI technolgy.
- $102 is the next price target for GOOG bulls.
Alphabet (GOOG) stock advanced 3.7% to $97.40 on Friday after the paid search and online advertising behemoth announced 12,000 job cuts. Recent data suggests Alphabet, the parent company of Google, had 187,000 global employees, and critics have often suggested that Google has too many employees working on too many non-core segements of the business. The NASDAQ has raced ahead by 0.8% on the open after two sessions of losses.
Alphabet stock news
Alongside Microsoft's (MSFT) recent announcement that it would let go of 10,000 workers and similar layoffs from Meta (META) and Amazon (AMZN), Alphabet and these other named tech giants have downsized by more than 50,000 total workers in recent months. That does not even count fairly large redundancies from the likes of SalesForce (CRM) and Netflix (NFLX).
One important aspect of the recent job cuts in big tech is that nearly all these companies underwent rapid hiring during the pandemic and are now downsizing as management teams expect the Federal Reserve's rapid tightening cycle to be reflected in a jolt to the economy in 2023. News earlier this week that December retail sales dropped -1.1% MoM have since fortified that thinking.
Alphabet CEO Sundar Pichai said in a statement that the layoffs would hit various "product areas, functions, levels and regions" of the conglomerate that houses Google Search, Gmail, YouTube and Android – to name just a few of its most well-known companies. Despite the cuts, Pichai said the streamlined company would emerge with a stronger focus on artificial intelligence.
Alphabet stock forecast
Alphabet stock gapped up on the open above $96 and now will think about retesting resistance at $102. Bulls probably need another catalyst to reach that price level however. GOOG stock last reached this price level on December 1 and last closed above it on October 25. If the excitement over Google's job cuts dissipates, then expect GOOG to drop back to two support zones that surround $85.50 and $83.50. At the moment though, the Moving Average Convergence Divergence (MACD) indicator is just now crossing over in a bullish position above the zero threshold, so expect this rally to have legs since GOOG was already in an uptrend.
GOOG daily chart
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
