Just ahead of its blowout first-quarter earnings report last week, Google laid off at least 200 employees from its “Core” teams, in a reorganization that will include moving some roles to India and Mexico, CNBC has learned.
Google’s Core unit is responsible for building the technical foundation behind the company’s flagship products and protecting users’ online safety, according to Google’s website. Core teams include key technical units from information technology, its Python developer team, technical infrastructure, security foundation, app platforms, core developers and various engineering roles.
At least 50 of the positions eliminated were in engineering at the company’s offices in Sunnyvale, California, filings show. Many of the Core teams will hire corresponding roles in Mexico and India, according to internal documents viewed by CNBC.
Asim Husain, vice president of Google Developer Ecosystem, announced some of the layoffs to his team in an email last week. He also spoke at a town hall and told employees that this was the biggest planned reduction for his team this year, an internal document shows.
“We intend to maintain our current global footprint while also expanding in high-growth global workforce locations so that we can operate closer to our partners and developer communities,” Husain wrote in the email.
Alphabet has been slashing headcount since early last year, when the company announced plans to eliminate about 12,000 jobs, or 6% of its workforce, following a downturn in the online ad market. Even with digital advertising rebounding in the past couple quarters, Alphabet has continued downsizing, with layoffs across multiple organizations this year.
CFO Ruth Porat announced in mid-April a restructuring to the company’s finance department, which included layoffs and moving positions to Bangalore and Mexico City. The company’s search boss, 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 U.S.
The latest cuts comes as the company enjoys its fastest growth rate since early 2022, alongside improving profit margins. Last week, Alphabet reported a 15% jump in first-quarter revenue from a year earlier, and announced its first-ever dividend and a $70 billion buyback.
“Announcements of this sort may leave many of you feeling uncertain or frustrated,” Husain wrote in the email to developers. He added that his message to developers is that the changes “are in service of our broader goals” as a company.
The teams involved in the reorganization have been key to the company’s developer tools, an area that’s being streamlined by Google as it incorporates more AI into the products. In February, Google announced a major rebrand of its chatbot from Bard to Gemini, the same name as the suit of AI models that power it.
Alphabet is gearing up for its annual developer conference, Google I/O, on May 14, where the company traditionally reveals new developer products and tools that have been underway during the prior year. Husain said in a memo explaining the developer changes that generative AI is at an “inflection point.”
“Recent advances in Generative AI across the industry, including Google’s Gemini, are changing the very nature of software development as we know it,” Husain wrote.
In a separate email, security engineering vice president Pankaj Rohatgi, told his team that, “In order to optimize for our business goals, we are expanding work to other locations, which will result in some role eliminations and proposed role eliminations.”
The Core layoffs also include the governance and protected data group, which will be at the center of regulatory challenges facing the company, particularly as lawmakers across the globe focus more on developments in AI. The European Union’s Digital Markets Act (DMA) went into effect in March, and is aimed at clamping down on anti-competitive practices in tech.
Evan Kotsovinos, Google’s vice president of governance and protected data, wrote about the upcoming changes in an email last week.
Kotsovinos said the team’s success means responding to “escalating regulatory focus” and is contingent on “moving faster.”
Raghavan, Google’s senior vice president overseeing search, recently referenced heightened competition, a more challenging regulatory environment and slower organic growth as the company’s “new operating reality.”
Google confirmed the Core reorganization and layoffs, and a spokesperson told CNBC that employees will be able to apply for open roles within Google and to access outplacement services.
“As we’ve said, we’re responsibly investing in our company’s biggest priorities and the significant opportunities ahead,” the spokesperson said in an email. “A number of our teams made changes to become more efficient and work better, remove layers and align their resources to their biggest product priorities.”
WATCH: Google alumni-led startups turn up pressure on top AI companies
Read the full article here
