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Alphabet (GOOGL) stock plunged yesterday as the company decided to slow down hiring new employees for the rest of this year and reduce spending in such areas as data centers.
Alphabet Inc (NASDAQ: GOOGL) stock dropped on April 15 after soaring the day before. It close 0.63% down at $1257.30. Today in the pre-market, GOOGL is 0.78% up, at $1,267.12.
At the beginning of 2020, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)stock performed quite well. The all-time high closing price was $1524.87 on February 19. In March, the whole market crashed because of the coronavirus pandemic. Alphabet succumbed to the negative impact of COVID-19 and on March 23 dropped to the record low of $1054.13.
On April 14, Alphabet stock jumped by 3% during the session and closed in the green. Moving up followed the announcement about Google partnering with Apple to combat coronavirus. Within the collaboration, the companies will enable the use of Bluetooth technology to help governments and health institutions reduce the spread of COVID-19. User privacy and security are essential to the design of the technology.
In May, both Apple and Google will release APIs that enable interoperability between Android and iOS devices using apps from public health authorities. Users will be able to download official apps in their app stores. Later, a broader Bluetooth-based contact tracing platform will be available.
Alphabet to Slow Down Hiring Process
The plunge of Alphabet stock on April 15 resulted from the company’s forced decision to slow down hiring new employees for the rest of this year. Besides, the company will reduce spending in areas like data centers.
Alphabet and Google CEO Sundar Pichai explained:
“We believe now is the time to significantly slow down the pace of hiring, while maintaining momentum in a small number of strategic areas where users and businesses rely on Google for ongoing support, and where our growth is critical to their success. Beyond hiring, we continue to invest, but will be recalibrating the focus and pace of our investments in areas like data centers and machines, and non-business essential marketing and travel.”
“Just like the 2008 financial crisis, the entire global economy is hurting, and Google and Alphabet are not immune to the effects of this global pandemic. We exist in an ecosystem of partnerships and interconnected businesses, many of whom are feeling significant pain.”
Coronavirus has provoked an incredible level of unemployment globally. Many companies have furloughed or laid off employees, leaving many families without bread and butter. Tourism industry, restaurants, bars, and hotels have suffered most. For example, Carmel Valley Ranch in California laid off 600 workers. McMenamins, the Northwest’s largest hotel chain and brewpub, laid off 3,000 employees. Pebblebrook Hotel Trust, which owns 54 hotels, laid off half of its 8,000 workers and may need to cut an additional 2,000.
Airlines have also suffered because of travel bans. For instance, Air Canada will lay off 5,100 members of its cabin crew. Scandinavian Airlines is going to lay off 10,000 employees, which makes up 90% of their staff.
When the pandemic is over is unknown. But the economies worldwide will obviously need to try hard to recover after beating the virus.