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By Yasin Ebrahim

Investing.com — Alphabet reported Thursday weaker-than-expected earnings and revenue for the fourth quarter as weaker online ad spending weighed on performance. The company also said that Q1 results would reflect a hit from costs related to job cuts.  

Alphabet Inc (NASDAQ:GOOGL) fell more than 1% in afterhours trading following the report.

The company reported earnings of $1.05 per share on revenue of $76.05 billion. That compared with expectations for earnings of $1.18 per share on revenue of $76.07B.

The miss on the top and bottom lines comes as revenue in its core advertising business was dented by a fall in revenue as advertisers, wary about the weaker economic backdrop, reined in spending.

Advertising revenue fell to $59B in Q4 from $61.24B in the prior-year period, with YouTube advertising revenue declining to $7.96B from $8.63B.

Google Cloud revenue jumped to $7.32B from $5.54B in the period-year period. 

Traffic acquisition costs, or TAC, a major cost for Google, fell to $12.93B from $13.43B. 

Against the backdrop of softer ad-spend, the tech giant has turned to cost-cutting measures, announcing earlier this month that it would axe about 12,000 jobs, or 6% of its global workforce.

As a result of the job cuts, the company flagged employee severance and related charges of $1.9B to $2.3B, the bulk of which would be recognized in the first quarter of 2023.

The tech giant also said its exit costs from trimming down its global office space would incur a $0.5B expense in Q1.

“We have significant work underway to improve all aspects of our cost structure, in support of our investments in our highest growth priorities to deliver long-term, profitable growth,” the company said.