Google is cutting its sales and marketing team by roughly 200 employees, in its largest round of layoffs yet.

The move is the web search leader's latest effort to cut costs amid a tough economy and a broad slowdown in advertising spending.

Coming off a year in which the company earned $4.2 billion on revenue of $21.8 billion, Google still is trimming its expenses in attempt to protect its profit margins and prevent its stock price from falling further.

Google's fortunes are tied to ad revenue that is dwindling as both marketers and consumers cut down on spending. In 2008, 97 percent of Google's revenue came from advertising. Some analysts say they believe the Mountain View company may finally be suffering its first quarter-to-quarter decline since it went public in 2004.

Once renowned for its free-spending ways, Google already has curtailed some employee perks, dumped outside contractors and closed services that are not paying off. Pulling the plug on a radio advertising division in February eliminated around 40 jobs.

Management has also clamped down on hiring after adding more than 17,000 workers in Google's first four and a half years as a public company. That decision prompted Google to lose 100 employee recruiters in January. The latest layoffs are concentrated in the division that sells Google's advertising. Google has nearly 21,000 employees.

In a blog posting, Google said it had hired too many employees doing the same jobs during its rapid expansion.

"Making changes of this kind is never easy — and we recognise that the recession makes the timing even more difficult for the Googlers concerned," wrote Omid Kordestani, the company's senior vice president of global sales and business development.

Google is the No. 1 search engine in the world, with a roughly 63 per cent market share in the United States, according to comScore.

Google's strength in text-based search advertising has shielded it from the more difficult conditions plaguing the online display ads that companies such as Yahoo! and AOL depend on.

A Google spokesperson said the company will seek new positions for some of the affected employees, but it will not be able to retain all of them.

Sameet Sinha, an analyst with JMP Securities, said the cuts were in keeping with the agenda of Chief Financial Officer Patrick Pichette, who took the job last year and has made cost-cutting a priority.

"His first line of attack was going after non-core expenses. Now he's looking at some of the major organisations there, where you can cut costs," he said.

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