Google to lay off 100 recruiters

Search giant also says it plans to shutter three offices amid worsening economy.

SAN FRANCISCO (Reuters) -- Google Inc. said it will lay off 100 full-time recruiters and close three engineering offices, the latest sign that the weak economy has not spared one of the technology industry's most resilient companies.

In a post on Google's official blog Wednesday, Laszlo Bock, Google's vice president of people operations, said the Mountain View, California-based company now needs fewer people focused on hiring.

But he added that "Google is still hiring at a "reduced rate.".

Google (GOOG, Fortune 500) had started by terminating contracts with external recruiters, but the worsening economy has necessitated the laying off of full-time workers, Bock said.

"The number is very small, but what concerns me is that this is the first example of laying off full-time employees in Google's history," said Collins Stewart analyst Sandeep Aggrawal.

"You hire people in anticipation of growth... But now, like anyone else, the growth outlook has definitely come down for Google," Aggrawal said, adding that he expects the Internet giant to grow at 20% this year, compared to a 60% growth rate in 2007.

Google, which is due to report fiscal fourth-quarter earnings next week, has been hurt by the worsening economy, which has crimped advertising spending. Corporate advertisers are more tightfisted with their dollars, which is stinging Google's main business, paid online search advertising.

The job cuts come after a series of other cost-cutting moves by Google, whose high-flying stock fell below $300 for the first time in three years in November.

Known for its extravagant holiday parties, Google decided to scale back on end-2008 celebrations, a source told Reuters earlier.

It had earlier cut a number of contract worker jobs, and pulled back some benefits for employees in its New York office cafeteria, in moves designed to save money.

Many Silicon Valley companies have been forced to slash costs in recent months, including laying off thousands of workers and freezing employee benefits, as they struggle with the fallout of the global downturn in financial markets and a deepening U.S. recession.

The 100 positions represent less than one-quarter of Google's total in-house recruiters, spokesman Matthew Furman said.

"We are working to try and find (them) other jobs at Google as internal candidates," he said. Google employs roughly 20,000 people.

In a separate blog post, Google's senior vice president of engineering and research Alan Eustace said the company was also shutting offices in Austin, Texas; Trondheim, Norway; and Lulea, Sweden, and asking about 70 engineers employed at these sites to move to other offices or leave.

Google shut its Phoenix, Arizona office in September and relocated most of its engineers to other offices, Eustace said.

Shares of the search engine giant closed down $13.35, or 4.3%, to end the day's trading on the Nasdaq at $300.97 or at less than half of its 52-week high of $657.40 on Jan 14, 2008.