SEATTLE – A search engine rating firm with offices in Kirkland will sack nearly 3,700 remote employees after losing a major contract with Google, but only a dozen of the affected workers live in Washington.
On Tuesday, RaterLabs notified the state it was laying off 3,657 workers effective April 6, according to the state Employment Security Department.
Although the initial notice didn’t say where the affected workers are located, a subsequent inquiry by ESD determined that just 12 were Washington residents, the agency reported Thursday.
The large number of layoffs led ESD to contact Appen and clarify the in-state impact “so state and local entities (and) agencies knew what level of support to prepare for,” an agency spokesperson said Thursday.
RaterLabs is what’s known as a quality rater, a third-party contractor that helps evaluate the quality and relevance of websites that appear in search results, according to media reports.
The company also helps train artificial intelligence systems technologies. Its client list has included top names in tech, including Amazon, Microsoft, Google, Apple and Facebook parent Meta.
Two weeks ago, Google terminated its contract with RaterLab’s parent company, Australia-based Appen, according to a Jan. 22 announcement by Appen. Google had hired Appen to help train Bard, its AI chatbot, according to the Verge.
“These workers provide critical support that keeps Google’s flagship Search results and Bard AI safe and functional for the company’s billions of users,” said Alphabet Workers Union, which represents Google workers and contractors, in a statement shortly after the contract was canceled.
RaterLabs is located in a Kirkland office park just west of Interstate 405, which the Appen website lists as its U.S. headquarters. Appen hadn’t responded to a request for information as of Thursday.
A LinkedIn page for RaterLabs’ Kirkland location indicated that just under 300 employees worked there, but Tuesday’s notice described the company as an organization with fully remote workers based in Kirkland.”
RaterLabs, which was founded in California in 2017, also evaluates “the quality and relevance of ads, content, and search results from social media sites,” according to Wahojobs.com, a news site about work-from-home jobs.
According to the announcement, Appen is associated with “more than 1 million skilled contractors who speak over 235 languages, in over 70,000 locations and 170 countries.”
The rating business has been known for its low wages. In 2022, Appen employees were part of a successful push by Alphabet Workers Union to boost raters’ pay from as low as $10 an hour to nearly $15, according to Forbes.
Appen saw a boom during the pandemic, when its stock price soared, and its market valuation ballooned to $4.3 billion in late 2020, according to CNBC.
But the company has been in a slide since, and shares are currently trading at around 19 cents.
Although Appen blamed that decline on “challenging external operating and macro conditions,” former employees said the company had suffered “years of weak quality controls and a disjointed organizational structure,” according to CNBC.
In its announcement, Appen said Google gave no prior notice it was canceling the contract, which had accounted for $82.8 million, or nearly 30%, of Appen’s 2023 revenue.
Given that loss, the cancellation was expected to have “a devastating impact on at least two thousand subcontracted Alphabet workers and their families in the U.S. and Canada,” Alphabet Workers Union said.