They cut back on advertising spending.
Internet giant Google gets most of its profits from its wildly popular Google Adsense program. Unfortunately the cutbacks on advertising has cut into Google's profits and Google Inc. is closing three engineering offices and cutting 100 recruiters from its work force. Afterall, who needs HR when you're not hiring for the moment?"Given the state of the economy, we recognized that we needed fewer people focused on hiring," Laszlo Bock, a Google vice president, wrote in a blog posting last night announcing the layoffs. In a separate blogpost, Google (Nasdaq: GOOG) said it would close its engineering offices in Austin, Texas; Trondheim, Norway and Lulea, Sweden, a step the company said would affect 70 workers.
"Our strong desire is to keep as many of these 70 engineering employees at Google as possible," wrote Google's vice-president for engineering and research, Alan Eustace. "Our long-term goal is not to trim the number of people we have working on engineering projects or reduce our global presence, but create a smaller number of more effective engineering sites."
The layoffs represent a tiny portion of Google's total work force of 20,100. But the move is a rare blemish on the company's worker-friendly reputation.
Google shares fell $9.34, or about 3%, to $291.63 in afternoon Nasdaq trading today.
In other news... USA foreclosures are up 81%
More than 2.3 million U.S. homeowners faced foreclosure proceedings in 2008, an 81% increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.More than 860,000 properties were actually repossessed by lenders, more than double the 2007 level.
The number of homes lost to foreclosure is expected to rise by another 18% in 2009.
Still, foreclosures – which keep breaking records going back 30 years, the Mortgage Bankers Association said – are likely to remain well above normal levels for years to come and that will continue to keep home prices from rebounding.
The four states with the highest foreclosure rates last year were Nevada, Florida, Arizona and California.
More than 1.1 million properties in those four states received a foreclosure notice, almost one-half the national total. And more than one in five of those households were in California, which is coping with massive job losses in the housing and mortgage industries, as well as a rapid decline in home prices.
In December, more than 303,000 properties received at least one foreclosure notice, up more than 40 per cent from a year earlier and up 17 per cent from November, according to RealtyTrac.
Nearly 79,000 properties were repossessed by lenders in December, a 61% increase over a year ago.
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