According to information obtained by CNBC, the alphabet has laid off employees from several teams within Google’s rapidly expanding cloud division.
The company informed employees of these layoffs last week, affecting roles in sales, consulting, go-to-market strategy, operations, and engineering, based on internal communications reviewed by CNBC.
Sources familiar with the matter, who requested anonymity due to lack of authorization to discuss the layoffs publicly, confirmed that at least 100 positions were eliminated.
An insider had previously reported some details regarding these layoffs.
A Google spokesperson told CNBC that these cuts are incremental across various teams to align its go-to-market organization better.
“As we’ve shared before, we continue to evolve our business to meet our customers’ priorities and the significant opportunity ahead,” the spokesperson stated.
“We maintain our commitment to investing in areas critical to our business and ensuring our long-term success.”
According to sources familiar with the situation, some of the affected employees had been involved in organizing the annual Google Cloud Next event held in mid-April.
Google has been conducting ongoing layoffs since early 2023. Employees have expressed concerns about increased demands to meet tighter deadlines with fewer resources and reduced opportunities for internal advancement despite the company’s record profits.
Last month, Google cut at least 200 employees from its “Core” organization, which includes critical teams and engineering talent. CEO Sundar Pichai informed employees there would be fewer layoffs in the second half of 2024.
Revenue for Google Cloud, which hosts much of the company’s artificial intelligence technology, surged 28% year-over-year to $9.57 billion in the latest quarter, surpassing estimates.
Operating income more than quadrupled to $900 million, indicating substantial profitability after years of investment to compete with Amazon Web Services and Microsoft Azure.
However, the cloud unit, led by CEO Thomas Kurian, faces mounting pressure to sustain growth as competition intensifies in the AI sector.
In conclusion,
Despite its impressive financial performance, Google’s decision to cut jobs in its cloud unit highlights the intense competition and rapid pace of technological advancements in the AI industry.
While these layoffs may seem counterintuitive given the unit’s growth, they may be a strategic move to streamline operations and ensure the company remains agile and competitive.
Nevertheless, Google must address employee concerns about workload and career progression to maintain morale and retain top talent.
Balancing cost-cutting measures with employee well-being will be vital to sustaining long-term success in the fiercely competitive cloud market.