Google‘s parent company, Alphabet, has begun reducing its workforce within Google’s cloud division, one of its most rapidly expanding sectors, according to sources.
The company informed staff of the layoffs last week, affecting various teams in the cloud unit, including sales, consulting, go-to-market strategy, operations and engineering, as revealed by internal communications reviewed by CNBC. Over 100 positions have been cut, confirmed sources familiar with the situation who requested anonymity due to the lack of authorisation to discuss the matter.
A Google spokesperson told CNBC that the reductions are part of an effort to better align its go-to-market organisation across various teams. “As we’ve shared before, we continue to evolve our business to meet our customers’ priorities and the significant opportunity ahead. We maintain our commitment to investing in areas that are critical to our business and ensure our long-term success” the spokesperson said.
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Business Insider had initially reported about these layoffs to some extent.
Some of those affected had been involved in the annual Google Cloud Next event held in mid-April, according to individuals familiar with the situation.
Since early 2023, Google has been conducting periodic layoffs. Employees have expressed concerns about tighter deadlines, reduced resources and limited opportunities for internal advancement, even as the company reports record profits.
Last month, Google cut at least 200 employees from its “Core” organisation, which included essential teams and engineering talent. CEO Sundar Pichai assured employees that the company would see fewer layoffs in the second half of 2024.
Google Cloud’s revenue, which encompasses much of the company’s artificial intelligence technology, surged 28% year-over-year to $9.57 billion in the latest quarter, exceeding estimates. Operating income soared to $900 million, marking a substantial profit after years of heavy investment to compete with Amazon Web Services (AWS) and Microsoft Azure.
Despite the impressive financial performance, the cloud division, led by CEO Thomas Kurian, faces increasing pressure to sustain its growth amid rising competition in AI.
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