A pedestrian walks past the Google campus in Mountain View, California, on January 27, 2022.
David Paul Morris/Bloomberg via Getty Images
Change to bonuses addresses uncertainty of 2023
Google employees who qualify for the bonuses will get 80% of the sum in January, with the rest coming in March or April, according to a memo obtained by CNBC. That’s a departure from Google’s typical practice of handing out full checks in January. A Google spokesman said he communicated “widely” about that change.
Google announced Friday that it would lay off about 12,000 people.
It’s not the only company adjusting or reducing bonus payments this year.
Goldman Sachs has reportedly cut its bonuses for junior bankers by up to 90%. The investment bank announced earlier this month job cuts for up to 3,200 employees, or 6.5% of its workforce.
Across all industries, small businesses reduced 2022 bonuses by 9.7% to an average of $526, down from $582 in 2021, according to Gusto, a payroll provider. They fell the most, by 10.7%, among financial firms, law firms and others in the “professional services” category.
“As companies prepare for what 2023 holds, they have handed out smaller year-end bonuses to close out 2022,” Luke Pardue, an economist at Gusto, wrote in a recent analysis, citing an uncertain economic outlook for next year. .
Bonds, and tax refunds, are not a guarantee
The timing and amount of year-end bonuses are generally not a guarantee, as companies have recently shown. And that means workers shouldn’t spend money they anticipate receiving but don’t yet have.
“Companies are so variable in how they determine and pay bonuses,” said McClanahan, a member of the CNBC Advisory Council.
Waiting until a windfall hits your account to spend it may seem like common sense; however, many workers fall into the trap of overextending themselves, he said.
More often, tax refunds are a bigger problem than bonuses, so people think they’ll get a bigger check from the government than is ultimately paid during tax season, McClanahan said.
Tax season for individuals begins on January 23. About 30% of Americans say they will rely on a tax refund windfall to make ends meet, according to a recent Credit Karma survey. However, the IRS has warned taxpayers that refunds may be smaller in 2023 now that many pandemic-era tax breaks have expired.