I reported skeptically on this issue earlier, but let’s call a spade a spade. Google used its contractor workforce to quickly scale without having to spend on permanent employees, and now, it’s using that same workforce to cut back costs. I’ve heard from a fair number of “laid off” contractors, in particular in Europe, and the reality is simply that: Google’s use of contractors outstripped the company’s ability to leverage them to the bottom line, and something had to be done. How much of this has to do with slowing growth? Hard to say, but it’s also hard to say that growth was not slowing. The world is in crisis, after all.
It’s a smart move by Google (control operating costs without hurting core employee base), but from the point of view of the folks effected, it’s layoffs nevertheless. Google most likely will grow past these cuts in its contractor workforce in the coming year(s), but the cutback is just that, a cutback. Cnet has more here.