Sundar Pichai, CEO of Alphabet Inc., during the 2024 Stanford Forum on Business, Government and Society in Stanford, California, US, on Wednesday, April 3, 2024.
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Ahead of the surprise first-quarter earnings report on April 25, Google CNBC has learned that the company has laid off at least 200 employees from its “core” teams, in a reorganization that will include moving some roles to India and Mexico.
The core unit is responsible for building the technical foundation behind the company's key products and protecting users' online safety, according to Google's website. The core teams include key technical units from IT, the Python developer team, technical infrastructure, security backbone, application platforms, core developers, and various engineering roles.
At least 50 of the jobs eliminated were in engineering at the company's offices in Sunnyvale, California, the filings show. Several core teams will assign corresponding roles in Mexico and India, according to internal documents seen by CNBC.
Asim Hussain, vice president of Google Developer Ecosystem, announced the news of the layoffs to his team in an email last week. He also spoke at City Hall and told staff that this was the largest planned reduction to his team this year, an internal document shows.
“We intend to maintain our existing global footprint while also expanding into high-growth global workforce locations so we can work closer to our partners and developer communities,” Hussain wrote in the email.
Alphabet has been cutting staff since early last year, when the company announced plans to cut about 12,000 jobs, or 6% of its workforce, in the wake of the downturn in the online advertising market. Even with a recent rebound in digital advertising, Alphabet has continued to downsize, with layoffs at several organizations this year.
CFO Ruth Porat announced in mid-April that the company's finance division would undergo a restructuring, necessitating layoffs and relocation of positions to Bangalore and Mexico City. The company's director of research, Prabhakar Raghavan, told employees at an all-hands meeting in March that Google plans to build teams closer to users in key markets, including India and Brazil, where labor is cheaper than in the United States.
The latest cuts come as the company enjoys its fastest growth rate since early 2022, along with improving profit margins. Last week, Alphabet reported a 15% jump in first-quarter revenue from a year earlier, announced its first-ever dividend and a $70 billion buyback.
“Ads of this type may leave many of you feeling unsure or frustrated,” Hussein wrote in an email to developers. He added that his message to developers is that the changes “serve our broader goals” as a company.
The teams involved in the reorganization were key to the company's developer tools, an area Google is working to simplify as it integrates more artificial intelligence into products. In February, Google announced a major rebranding of its chatbot from Bard to Gemini, the same name as the suite of AI models it powers.
Alphabet is gearing up to hold its annual developer conference, Google I/O, on May 14, where the company traditionally unveils new developer products and tools in the works over the previous year. Generative AI is at an “inflection point,” Hussein said in a note explaining the developer changes.
“Recent advances in generative AI across industry, including Google's Gemini, are changing the nature of software development as we know it,” Hussain wrote.
In a separate email, Pankaj Rohatgi, vice president of security engineering at Google, told his team: “In order to improve our business goals, we are expanding the work to other locations, which will result in eliminating some roles and eliminating proposed roles.”
The core layoffs also include the governance and protected data group, which will be at the heart of the regulatory challenges facing the company, especially as regulators around the world focus more on developments in artificial intelligence. The EU Digital Markets Act, which came into force in March, aims to clamp down on anti-competitive practices in technology.
Evan Koutsovinos, Google's vice president of governance and protected data, addressed the upcoming changes last week.
The team's success means responding to “escalating regulatory focus” and hinges on “moving faster,” Koutsouvinos said in an email.
Raghavan, senior vice president overseeing search at Google, recently pointed to increased competition, a more challenging regulatory environment, and slower organic growth as the company's “new operational reality.”
When reached for comment, Google confirmed the fundamental reorganization and layoffs, and a spokesperson told CNBC that employees will be able to apply for open roles within Google and access external recruiting services.
“As we've said, we are investing responsibly in our company's biggest priorities and next big opportunities,” the spokesperson said in an email. “A number of our teams have made changes to become more efficient and perform better, removing layers and aligning their resources with their biggest product priorities.”
