It’s been a season of tech layoffs, and the collapse in digital ad rates has hit Google particularly hard. Last January saw 12,000 jobs cut, and already this year there have been more painful cuts and restructuring — although the total number of layoffs is still unclear. But one cut stood out in particular, ending the company’s $82.8 million contract with the outsourcing firm Appen, which provided search raters to test the quality of Google Search.
Appen isn’t a household name, but the company’s global reach and flexibility have made it a prominent source for AI training data. Annotating data for a large language model is similar work to rating the outputs of Google Search, serving as the human in the loop of a mostly automated process — so it makes sense that the same workers often serve both purposes. In both cases, it tends to be badly paid and precarious work.
Appen, which makes more than 20% of its revenue from the contract, seems to have been caught off guard by the cancellation, describing the decision as “unexpected and disappointing” in a public statement.
But for seasoned Google-watchers, the end of the contract shouldn’t have come as a complete surprise. All of last year, the company said it was taking a hard look at vendor contracts, as part of its general cost-cutting efforts. As Sundar Pichai put it on an earnings call in April, the company would be “managing our spend with suppliers and vendors more effectively.” With Appen, that meant cutting off work entirely.
The bigger question is how Google plans to replace the Appen workers. On the same call, Pichai said Alphabet would be “using AI and automation to improve productivity,” and some have already jumped to the conclusion that AI will be filling in the gaps. But Google has plenty of other search-rater contracts that haven’t been canceled (at least not yet), and the company has privately suggested that other suppliers will take Appen’s place.
More broadly, Search is one of the company’s most important products, and the search raters aren’t that expensive compared to the untold billions Google makes on Search ads. As Search Engine Land’s Barry Schwartz told me, “I still think Google wants humans to evaluate if the AI is working on it.”
The simpler explanation is that Appen had just gotten too expensive, and Google saw a chance to turn an $82 million budget line into an $81 million budget line. The move comes just a year after search raters at Appen got a contract-wide raise to $14.50 an hour — the result of internal lobbying from the Alphabet Workers Union. The rising hype around AI has led to a rush of competitors like Scale AI, eager to tempt away clients with lower rates and more flexible working terms.
But the incident is also a sober reminder of how labor works in today’s tech industry. Google Search is one of the oldest products we have from this generation of algorithmic systems. For decades, it’s been staffed by a combination of well-paid engineers and invisible contract workers. As economic conditions shift and companies move to reduce costs, the contract workers are an easy place to cut, either by lowering output or discontinuing the contract entirely. Thousands of miles from Mountain View, they have no way to leverage the company. All end users will see is the same Search bar.
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FAQs
But one cut stood out in particular, ending the company's $82.8 million contract with the outsourcing firm Appen, which provided search raters to test the quality of Google Search. Appen isn't a household name, but the company's global reach and flexibility have made it a prominent source for AI training data.
Will Google have more layoffs? ›
More layoffs are coming in 2024
In January, CEO Sundar Pichai warned of more Google layoffs in 2024. The upcoming cuts, he said in an internal memo to employees, are about "removing layers to simplify execution and drive velocity in some areas." The "role eliminations" would not reach the same scale as 2023.
Is Google lays off 200 workers shifts jobs to Mexico and India in latest restructuring? ›
Bengaluru: Google has recently laid off 200 employees from its core teams as part of a reorganisation effort, according to a report by CNBC. The restructuring will involve shifting some of the roles to India and Mexico. Affected employees will have the opportunity to apply for open positions within the company.
Who is the CEO of appen? ›
Why is Google firing so many employees? ›
Google has framed the layoffs as a necessary step to free up resources to invest in AI, which has emerged as an existential crisis.
Who is laying off in 2024? ›
Companies like Tesla, Amazon, Google, TikTok, Snap and Microsoft have conducted sizable layoffs in the first months of 2024. Smaller-sized startups have also seen a fair amount of cuts, and in some cases, have shut down operations altogether.
Why did Appen fall? ›
The Appen share price is in the red amid slumping revenues. Management said the 29.7% year on year decline in revenue was driven by a lower contribution from its global services. New markets revenue, which was down 7.8% from 2022, was hit by a 46.5% decline in Appen's global product.
Does Appen pay real money? ›
You receive payment monthly (within 30 days of your invoice) through your preferred payment method. In most cases you can choose to be paid directly into your bank, via PayPal or through Payoneer. As you will be working as an Independent Contractor, you will need to take care of your own taxes.
Can I trust Appen? ›
Is Appen A Scam? No, Appen isn't a scam, and the company has plenty of positive reviews online and pays its contractors on time. However, there are lots of Appen job scams going around trying to steal people's information and money.
How many Google layoffs in 2024? ›
Google Headcounts Shrinks By 10,000
As of March 31, 2024, Google has 180,895 employees, according to Google's recent U.S. Securities and Exchange Commission filing. This employee count is down nearly 10,000 compared to Google's headcount of 190,711 at the end of March 2023.
Technology giant Google is executing fresh layoffs in a bid to cut costs. The layoffs have impacted staff across Google's real estate and finance departments, as per a Business Insider report. In the finance department, employees were let go in treasury, business services, and revenue cash operations.
Did Google just laid off their entire Python team to cut costs? ›
The reason behind Google's decision to lay off its Python team is part of a broader strategy to reduce costs by hiring less expensive labor outside the United States. This move is seen as a cost-cutting measure aimed at optimizing Google's workforce according to current business needs and technological advancements.
Why did Google lay off Python employees? ›
However, Google hasn't eliminated its Python team entirely but has replaced the existing team with another group based in Munich. Some users suggest that this move is aimed at cutting costs by exploring cheaper options outside the US.
