Navigating Competitive Pressures in AI
Bloomberg reports that Google is reevaluating its business strategies as a result of facing increasing competition in artificial intelligence from Microsoft Corp. and ChatGPT creator OpenAI. In recent investor calls, Google’s executives have emphasized the importance of scrutinizing operations to identify potential cost reductions.
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This approach aims to reallocate resources toward priority areas in AI. “Throughout the second half of 2023, a number of our teams made changes to become more efficient,” a Google spokesperson explained to The Verge, highlighting the company’s adaptive strategy in a competitive market.
Market Reaction Amid Organizational Changes
Despite the significant organizational changes, Alphabet’s stock prices remained relatively stable, closing at $142.08 in New York, as reported by Bloomberg.
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This steadiness in the stock market suggests investor confidence or acceptance of Google’s restructuring efforts as a necessary step for future growth and competitiveness.
Broad Impact of Layoffs Across Levels
Bloomberg reveals that the layoffs have affected a wide range of positions, from rank-and-file employees to executives. In California alone, disclosures reveal that 630 workers, including four vice presidents and 25 directors, were laid off.
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These cuts indicate a comprehensive approach to reducing costs, affecting employees at various levels of the organization. Bloomberg reports that The Alphabet Workers Union revealed that “more than 1,000 workers have been let go so far in total.”
Fitbit Founders Exit Google
Reuters also reports that Fitbit co-founders James Park and Eric Friedman are leaving Google.
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This exit is part of the larger organizational restructuring following Google’s acquisition of Fitbit in 2019 for $2.1 billion.
Continued Job Cuts Stir Silicon Valley
Google’s decision to cut about 12,000 jobs, more than 6% of its global workforce, has caused concern in Silicon Valley.
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These layoffs continued throughout 2023, affecting various departments, including recruiting, new products, and the Waze mapping app, as reported by Reuters.
Subtle Communication of Recent Layoffs
Bloomberg notes that unlike the large-scale layoffs announced in 2023 by Alphabet CEO Sundar Pichai, this year’s job cuts have been communicated less publicly.
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The time around, they have often been announced by lower-level leaders such as vice presidents and human resources, according to a former employee and current worker.
Employee Discussions on Layoffs
Bloomberg details how the news of layoffs within Google spread informally among employees, primarily through Discord chats, hallway conversations, and social networks.
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A document listing the affected roles and resources for laid-off colleagues was also shared among the staff.
Personal Impact of Layoffs
One Google employee shared his experience of being laid off with Bloomberg, stating that he realized his job was gone when he couldn’t access his work email and found a message revealing the news in his personal email.
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He spoke about the negative impact of ongoing micro-layoffs on company morale and trust.
Anticipating Further Changes
The focus on cost-cutting at Google has led employees to consider alternative plans for their futures, as the atmosphere of uncertainty grows.
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A current Google employee told Bloomberg that many are discussing the need for a “Plan B,” acknowledging the possibility of more changes ahead.
Uncertainty Over Extent of Job Cuts
Determining the full extent of the job cuts at Google remains challenging, as revealed by Bloomberg.
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Google, with a workforce of around 182,000 employees as of Sept. 30, 2023, according to regulatory filings, has maintained a degree of ambiguity regarding the total number of affected jobs, adding to the uncertainty among employees.
Google Restructures Ad Sales Team
Following the layoffs of around 1000 employees, Google announced that it is further reducing its workforce, impacting its advertising sales team. Google spokesperson Chris Pappas confirmed the elimination of “a few hundred roles globally” to The Verge.
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Business Insider’s report, citing a memo from Google senior vice president Philipp Schindler, revealed that the layoffs would primarily affect the Large Customer Sales (LCS) unit.