Google’s parent Alphabet Inc. is eliminating about 12,000 jobs, or six per cent of its workforce, it said in a staff memo Friday, as the technology sector reels from layoffs and companies stake their futures on artificial intelligence (AI).
The cuts come at a delicate moment for the U.S. company, which has long been the leader in key areas of AI research.
Alphabet now faces a challenge from Microsoft Corp. in a branch of tech that can, for instance, create virtually any content a user can think up and type in a text box.
Microsoft this week said recession worries were forcing it to shed 10,000 jobs, less than five per cent of its workforce, and it would focus on imbuing its products with more AI going forward — a point Alphabet’s CEO Sundar Pichai echoed in the memo.
Alphabet faced “a different economic reality” from the past two years when it rapidly expanded its workforce, decisions for which Pichai said he took “full responsibility.”
Pichai became Alphabet CEO in 2019.
Still, he said, Google was gearing up “to share some entirely new experiences for users, developers and businesses,” and the company has “a substantial opportunity in front of us with AI across our products.”
The company has been working on a major AI launch, two people familiar with the matter told Reuters. One of the sources said it would take place in the spring of this year.
Susannah Streeter, an analyst with Hargreaves Lansdown, said Alphabet’s advertising business, which underpins Google’s search engine and YouTube, was not immune to economic turbulence.
“Ad growth has come off the boil, a sharp contrast from the busy days of the post-pandemic reopening, which saw a surge in consumer spending,” she said. The company faces competitive and regulatory threats as well,