A First for Google: Layoffs
In the first sizable layoffs in its history, Google is cutting about 300 jobs from the American
operations of DoubleClick, the advertising technology company that it acquired recently, according to a person with direct knowledge of Google’s plans.
The cuts represent about a quarter of DoubleClick’s American work force of about 1,200. The company has about 1,500 employees worldwide, and the chief executive of Google, Eric E. Schmidt, has suggested that job cuts would also affect DoubleClick’s overseas operations at a later date.
Google declined to confirm the number of layoffs.
In a statement, the company said: “Since our acquisition of DoubleClick closed on March 11, we have been working to match and align DoubleClick employees in the U.S. with our organizational plan for the business. As with many mergers, this review has resulted in a reduction in headcount at the acquired company.”
Google said it also planned to sell a DoubleClick unit, Performics Search Marketing, that helps marketers place ads on search engines, including those owned by Google and its main rivals, Yahoo and Microsoft.
“It is clear to us that we do not want to be in the search engine marketing business,” Tom Phillips, director of DoubleClick integration at Google, wrote on the company’s official blog.
“At Google, maintaining objectivity in both search and advertising is paramount to our mission and core to the trust we ask from our users.”
The decision to sell Performics Search Marketing is not surprising, said Ellen Siminoff, chairman of search marketing company Efficient Frontier. Google’s job is to get paid as much as possible for the ads that appear on its pages.
“If you are a search marketing agency, your goal is to get the most for your customers’ money,” Ms. Siminoff added, noting that those two goals could be in conflict.
Mr. Phillips said Google would retain the affiliate marketing portion of the Performics unit, which helps advertisers establish networks of Web sites that can refer customers to them.
Mr. Phillips did not identify a buyer but said he had “received preliminary interest” from a number of Google’s existing partners.
Some DoubleClick employees were being laid off Wednesday, while others were being offered transitional roles, Google said. The transitional roles are expected to end after the two companies are fully integrated, said the person with knowledge of Google’s plans.
The cuts follow Google’s largest acquisition ever and were widely expected. But the number is higher than some analysts predicted and suggests that Google, which has hired aggressively in the last several years, may have become more cautious.
Google added more than 6,100 workers in 2007 and ended the year with 16,805 employees worldwide. Amid shareholder concerns about its fast-rising expenses, Mr. Schmidt promised investors last year that Google would slow its rate of hiring.