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Google halves its marketing budget in half in the second half of 2020, CNBC reports, citing internal data.
A letter to the tech giant’s marketing staff said costs would be cut. Hiring of new full-time and part-time employees is also reported to be frozen.
“There are budget cuts and a freeze on Google’s marketing recruitment. We, along with the rest of the marketing, were asked to cut our budget by approximately 50% in the second half,” a global CEO said in a statement. . sent to employees on Wednesday.
A company spokesperson confirmed that the budgets of some company departments will be cut in half.
“As announced last week, we are re-evaluating the pace of our investment plans for the rest of 2020 and will focus on a select number of major marketing services. We continue to have a stable marketing budget, especially in the digital business areas. and others, “he said. The company’s spokesperson for CNBC.
Google shares fell nearly 2% in the hours after the announcement.
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The drastic steps come a week after Alphabet CEO Sundar Pichai said Google would withdraw part of its investment for the rest of the year amid the Covid-19 crisis, starting with the appointments. However, Pichai said at the time that the changes in marketing would be small and not as drastic as is announced now.
“In addition to hiring, we continue to invest, but we will calibrate the focus and pace of our investments in areas such as data centers and machines and marketing and non-business travel,” Peach said in a staff note last week.
The news comes as the company faces economic pressure from the Covid-19 pandemic that has impacted the global economy. CNBC last week also revealed that the company has completed training for many of its employees.
The announcement also comes days before the company announces its second-quarter earnings data.
Before the pandemic, Google hoped to increase marketing costs compared to last year.
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