Google hit by largest round of layoffs

Coming off a year in which the company earned $4.2 billion on revenue of $22 billion, Google still is trimming expenses in an attempt to protect its profit margins and prevent its slumping stock price from falling even further.

Google's fortunes are tied to ad spending that's dwindling as both marketers and consumers squirrel away more cash. Although Google's revenue has continued to rise during the 15-month-old recession, some analysts say they believe the company may finally be suffering its first quarter-to-quarter decline since it went public in 2004.

It's a guessing game because Google steadfastly refuses to offer financial guidance. But Google's recent actions have left little doubt that management is bracing for a possible downturn.

Once renowned for its free-spending ways, Google already has curtailed some employee perquisites, dumped outside contractors, and closed services that aren't paying off.

Management also has clamped down on hiring after adding more than 17,000 workers in Google's first 4.5 years as a public company.

The latest layoffs are concentrated in the division that sells Google's advertising.