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Some Google contractors will be saying goodbye to Google's posh Silicon Valley headquarters soon -- and to their jobs.  (Source: Daniel Terdiman/CNET News)
Typically successful tech giant shows signs of struggles that are sweeping the entire industry

Google, long a seemingly infallible power in the tech industry has began to show the same signs of the same weakness that is sweeping much of the tech industry.  Like its competitor Yahoo, it has also begun to make potentially large cuts to its workforce. 

The cuts come exclusively to its workforce of over 10,000 contractors. The San Jose Mercury News story, which first broke the layoffs story in October, quoted Sergey Brin, Google's co-founder as saying about the number of layoffs, "It's really high." 

According to the report, "He said Google began looking at the number six months ago and has a plan to significantly reduce that number through vendor management, converting some contractors to regular employees, and other approaches."

Google spokeswoman Jane Penner refused to comment on precisely how many jobs would be culled, whether the contracts would be canceled or simply not renewed, and the timeframe for the cuts.  However, she did confirm some would be laid off or reassigned.

She stated, "We have 10,000 [contractors], and we have had a plan in place for awhile to significantly reduce that number.  This is something we've been thinking about for awhile -- six or seven months. It predates the most acute phase of the [present economic] crisis."

Google is still slowly hiring and has 20,123 employees of its own at last count.  It may hire only a handful of the cut contractors.

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Contractors
By Spivonious on 11/26/2008 9:46:16 AM , Rating: 4
That's why I stayed away from contract jobs when I was searching a few years ago. You have no guarantee that you'll have work once the current project is finished.




RE: Contractors
By SlipDizzy on 11/26/2008 10:18:18 AM , Rating: 4
Contract work can be awesome and pay very well, or it can be this. Flip the coin and bite the bullet.


RE: Contractors
By phxfreddy on 11/30/2008 5:05:02 PM , Rating: 2
......and what is so bad about being laid off. The scent of free air can smell pretty good!

I have always felt great to get out of places that are getting stale..... and to be freebooter is to feel suffocated if you stay in one location too long!

arrrg and keep yer mitts off me gold bricks!


RE: Contractors
By amanojaku on 11/26/2008 10:36:57 AM , Rating: 2
*Scratches head* I thought the point behind contractor work was that it IS volatile? You don't have to take on work, IF it's available. It's great for people who don't want to stay in the same place, bad for people who need/want stability. It's ok for those of us who can't find permanent jobs and are sick of unemployment. Or have bills to pay.


RE: Contractors
By Myg on 11/26/2008 12:24:09 PM , Rating: 3
Don't ever get caught into the idea that any job is "permanent"; Always have a backup plan/ 2nd job possibility lined up, or 3rd even when your in a "stable" sitatuion. If you can't, spent your hobby time cooking up ways to make a seperate income that, if when things go badly; you can invest more time in and make something out of.


RE: Contractors
By Spivonious on 11/26/2008 1:14:21 PM , Rating: 4
That's why I have an emergency fund that currently has about 3 months worth of salary in it. If I end up getting laid off, there are always jobs available in retail and food services, and that coupled with the emergency fund and unemployment benefits means that I'll have plenty of time to find another job.


RE: Contractors
By InvertMe on 11/26/2008 10:41:42 AM , Rating: 3
I am a contractor in my current position and I feel you on not having any security. Not that being a real employee helps much anymore either.

On the plus side I make about $15.00 more an hour and get paid overtime. Paychecks are sweet :)

Really though companies can do other things to save money besides laying people off.

I instituted a program at my previous work that eliminated every local printer from the work place. No more inkjets of any sort.

This resulted in a 4 part savings.

1) No more printing with insanely expensive ink
2) People printed less because they had to "walk to it"
3) No more purchases of local printers
4) Less support calls to fix broken printers

This was just one of the many cost savings I introduced to the company and with this one alone the savings per year could have saved 5 or more positions from termination.

I wish companies would look to work smarter and keep employees. Unless they are just trimming dead wood then by all means let them go and get people who want to work and do their job well.


RE: Contractors
By Mitch101 on 11/26/2008 11:03:38 AM , Rating: 2
I cant tell you how many places I have worked that throw money at a 3rd party application looking to solve their problems instead of just developing something in house or leveraging the free stuff that comes with the OS/Application.

For example someone made the decision to buy an outside companies DNS system over using the built in Microsoft one and its cost the company millions and is a poor product and requires 3 people to manage. Network speed has greatly degraded with this product. The Microsoft DNS would improve performance and cost nothing and could leverage some of the Active directory people.

Monitoring applications are probably the worst offenders because most companies never use them properly or the monitoring application causes the servers problems (Tivoli!!!). These are programs that are supposed to help monitor issues and they are actually causing outages, never report a problem, or generate false positives which cause techs to log in billing hours, etc. Meanwhile perfmon, insight manager, built in, and some scratch code found on the web work just as good if not better.


RE: Contractors
By phxfreddy on 11/30/2008 5:06:59 PM , Rating: 2
gee save on printing! .... that will really make up for the 100 dollar an hour labor ! LOL not!


RE: Contractors
By Mitch101 on 11/26/2008 10:48:17 AM , Rating: 2
I know you don't mean to start a gripe but your almost hitting a nerve with me as I cannot seem to get a break in going perm with a good company. Seems I am forever on the loop of keep renewing my contract until the company goes into a contract freeze then a month or two into my new contract at another company call me up with renewed budgets/contracts asking me if I would like to come back. This seems to happen mainly with large corporations because I have had many co workers leave to work for smaller companies because they are the only ones hiring perm. Only the small companies seem to hire perm but they usually don't pay very well either.


RE: Contractors
By Master Kenobi (blog) on 11/26/2008 11:26:08 AM , Rating: 3
Once you land a perm position, its easier to stay in the perm spots even if you move companies. I refuse to take contract positions and whenever I interview I tell them I'm a current fulltime employee of company X, you have to offer the same or we have nothing to discuss. As long as your resume is impressive, and they need the skillset you have, you have room to deal.


RE: Contractors
By Reflex on 11/26/2008 11:59:59 AM , Rating: 2
For some security means more than anything else I guess. I used to be full time but I gave it up to go contractor. I get paid better, I get occasional layoffs(which I save for and treat as vacations), and I get to renegotiate benefits and pay at least once a year. I greatly enjoy being a contractor, it has made working fun again. When I'm sick of a product I just move on to another team.

By age 25 I was burnt out on tech. Then I quit. Came back as a contractor and have found the past six years to be enjoyable again. You couldn't pay me enough to make me go full time again.


RE: Contractors
By Mitch101 on 11/26/2008 1:11:36 PM , Rating: 2
Ive held nice ranking IT positions in several Dow 100 companies and a pair of Dow 10 companies.

There never seems to be any perm when I am job hunting and I can only go so long without a paycheck before I have to agree to another contract. I also seem to get involved with companies that go into re-org mid contract and the perm position that should have opened up turns to going to make cuts in the department. I always survive. Around this time of year it gets frustrating because when they are getting bonuses which never happens as a contractor.

On a positive note I am in a safe company from the economic mess in fact were thriving because of the economic downturn of people rushing to put money where I work and finally I am employed even if I am not an employee.


RE: Contractors
By Xavitar on 11/27/2008 1:44:21 PM , Rating: 2
You are missing the boat on contracting and what makes it worthwhile or not.

Surely, contracting is not for everybody -- at least not as a career path. Contractors who are successful make a lot more money than people working at salaried, full-time jobs. Everybody knows that, right... The thing is, they generally have regular work, too. They continually find work because they possess better professional and task-related skills than others. Contracting engineers are typically uber engineers who are also well rounded socially. They keep their contracting positions, often times even through layoffs, simply because they are indispensably good at what they do. In a sense, really good contractors can hold a corporation for ransom because they know that they are very difficult to replace. The corporation would rather layoff a couple of people who have been working there for 15-30 years and accomplished very little while sucking up huge amounts of resources in compounded raises and benefits.

The situation with Google is something else entirely. Google's workforce was tilted way too far towards contracting -- roughly 1/3 of all employees. That number of contractors simply isn't sustainable from a cost perspective, but it is understandable why they did it. They wanted to hire the most talent possible in a short period of time, and so they were forced to take on a lot of contractors. Most businesses go through phases like that, tech companies more than others. Google's strategy will probably payoff. By hiring on loads of contractors during their start-up boom years, they have invested heavily in positioning themselves in the market place and accomplished market dominance in a very short time span. For a corporation, it is much easier to sit on the top of the hill and defend it than it is to climb it in the first place. Just look at Microsoft, Intel, etc. Nobody can really compete with them. Google saw an opening in online search & services that was not dominated by a single player and they put themselves there, perhaps at any cost.


RE: Contractors
By Xavitar on 11/27/2008 1:48:42 PM , Rating: 2
I hate that you can't edit at all, here.

To tie my last paragraph into the main point:

Google is infallible. Laying off these contractors is exactly what they need to be doing right now, and hiring in the first place was also a wise decision as it gave them a competitive edge and allowed them to fill the online services niche market. There is now a big, fat, G-shaped ass print on top of the online sector... And good luck to anyone who attempts to dislodge the fat ass that made it.


RE: Contractors
By rhog on 11/29/2008 9:05:13 PM , Rating: 2
The graveyards are full of indispensible people. No one is THAT indispensible nor do I think Contractors are any better than permanent employees in the skills department. As a business owner and engineer that has done both Contracting and perm employment I can tell you that from a technology standpoint you don't use contractors for the most important projects that deal with the company’s primary IP. This is just not good business. It is not good business because you don't want to let a contractor take your IP down the street to your competitor. I consider contractors to be great "Hole Fillers" but a good business should never rely on them to the point where they cannot be let got at a moment's notice. After all, if your need someone that bad for a specific job you will hire them for that job. I know there are exceptions to this rule, but I believe that Google is doing exactly what you when there is a “down turn” you lay off the "temps" first.


Google Infallible? Bah humbug!
By MrDiSante on 11/26/2008 10:38:22 AM , Rating: 2
Of all the tech giants Google is perhaps most likely to be affected by the economic downturn. Google's only significant source of revenue is advertising. Advertising is one of the first things that companies will cut down on, in a situation like this. Hence, Google will be one of the first to suffer.

They'll get through this, but they will definitely feel the pinch, and probably more than the average, more traditional tech company (e.g. Microsoft, IBM, Sun, etc).




RE: Google Infallible? Bah humbug!
By Xavitar on 11/27/2008 1:52:44 PM , Rating: 2
I think you're wrong. Google's advertising rates are predominantly based on performance. If your ads don't generate traffic, you don't pay. Simple as that. This form of marketing is very attractive to corporations during an economic downturn. I see Google's services being positioned well in a market were everyone is desperate to drive sales and exposure, but very few have budgets to justify large, upfront advertising expenditures.


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