- Google reduced staff in its cloud division on Wednesday, targeting a few teams, as part of a strategic realignment to meet customer needs and seize opportunities, though Bloomberg couldn’t specify the number of affected workers due to the unannounced nature of the cuts.
- The layoffs follow Alphabet’s February earnings shortfall on cloud revenue projections and a 2025 capex forecast exceeding expectations, coming after smaller 2024 reductions like the January Platforms and Devices unit’s voluntary exit program noted by 9to5Google.
- CFO Anat Ashkenazi projected selective headcount growth in AI and cloud for 2025, despite the cuts, mirroring industry moves by Amazon (AMZN), Meta (META), Salesforce (CRM), and Microsoft (MSFT) to optimize staff while investing in AI, with Google Cloud remaining a key growth focus.
Alphabet Inc.’s Google (GOOG, GOOGL) trimmed staff in its cloud division on Wednesday, a targeted reduction affecting a few teams, as reported by Bloomberg citing sources familiar with the matter who couldn’t specify the number of impacted workers since the move hasn’t been publicly disclosed. A Google spokesperson confirmed the adjustments, stating the company is realigning to meet customer needs and capitalize on significant opportunities ahead, a process mirrored across various units to bolster critical business areas for long-term success. The layoffs follow a February earnings report where Alphabet missed analysts’ cloud revenue expectations, coupled with 2025 capital expenditure guidance that outstripped forecasts, reflecting heavy AI investments amid slower growth in a division seen as a vital growth pillar beyond Google’s maturing search business.
The cloud cuts slot into a pattern of smaller retrenchments throughout 2024, including a January “voluntary exit program” for the Platforms and Devices unit – merging Pixel hardware and Android staff – as part of a broader reorganization, first noted by 9to5Google, signaling a deliberate shift to optimize resources. CFO Anat Ashkenazi, during the February earnings call, projected some headcount growth in 2025 for key areas like AI and cloud, suggesting the layoffs are a pruning rather than a retreat, even as the unit faces pressure to balance ambitious AI spending with profitability. This comes amid an industry-wide wave of workforce reductions, with peers like Amazon (AMZN), Meta (META), Salesforce (CRM), and Microsoft (MSFT) shedding underperforming staff or tapping cheaper overseas labor to fund AI without sacrificing margins, a challenge Google Cloud must navigate as a cornerstone of Alphabet’s future.
Google’s cloud division remains a strategic linchpin, despite its growth slowdown, with the Wednesday layoffs reflecting a calculated move to sharpen focus rather than a broad pullback, aligning with Ashkenazi’s nod to selective expansion in AI and cloud. The tech giant’s earlier 2024 cuts, rippling unit by unit, and the Platforms and Devices adjustment highlight a year of recalibration, now hitting cloud as Alphabet juggles AI’s cost-intensive promise against investor expectations. Bloomberg’s report underscores the stakes—Google Cloud’s role as a growth bet demands efficiency, and these staff trims signal a disciplined approach to sustaining its momentum in a competitive, AI-driven landscape where every move is under scrutiny.
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