Google CEO Sundar Pichai has been on a cost-cutting tear over the last six months, shutting down various projects inside the company. This Friday, the ax has finally fallen on a big chunk of Google’s workforce. In its largest layoff ever, Google says it will cut 12,000 jobs across Google and its parent company, Alphabet. The cuts represent about 6 percent of Google’s workforce and match similar recent moves by Microsoft and Amazon.
Pichai announced the layoffs on the Google blog, saying US employees who are being let go have already been informed. For international employees, Pichai said that “this process will take longer due to local laws and practices.” Pichai blamed the layoffs on the economy, saying, “We hired for a different economic reality than the one we face today.”
As always, Pichai talked up AI as the future of the company, saying, “Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.” Google has struggled to monetize much of its AI work, though. The highest-profile Google AI product is the Google Assistant, but that is reportedly seeing reduced support after plans to monetize it failed (Amazon Alexa is facing a similar fate). Deepmind wowed the world with its ability to take on top players of the complicated game “Go,” but that project never translated into any kind of business.
The buzzy new thing in AI is a collection of bots that take on creative tasks, like the ChatGPT chatbot and artwork generators. The rise of those projects has damaged Google’s reputation as a leader in AI and caused Pichai to declare a “code red” at the company. While Google is supposedly working on a chatbot product, in a world where useful tools like Alexa and Google Assistant don’t make any money, it’s unclear why a creative writing bot would be any different.
Pichai’s cost-cutting mission started in July when he said the company’s productivity was “not where it needs to be.” Google then killed the hardware division’s laptop efforts, spun off Project Loon, cut the Area 120 “idea incubator” group in half, killed Google Stadia, decided to invest less in Google Assistant, merged Waze into Google Maps, cut 15 percent of Alphabet health company Verily’s workforce, and cut 17 percent of the staff at the “Intrinsic” Alphabet robotics company.
Pichai says there will be a town hall on Monday.