Dive Brief:

• Google plans to restructure its finance team in a move that will include layoffs as it prepares to take advantage of the coming AI boom, President, Chief Investment Officer and CFO Ruth Porat said in an internal memo obtained by CNBC.
• The restructuring, which will include re-locations for part of the staff as well as layoffs, comes as the Mountain View, Calif.-based company looks to take advantage of the “tremendous platform shift with AI,” Porat wrote in the memo according to a Wednesday report by CNBC.
• The shift offers the company the opportunity to “make more helpful products for billions of users and provide faster solutions to our customers, but it also means we collectively have to make tough decisions, including how and where we work to align with our highest priority areas,” Porat wrote.

Dive Insight:

Alphabet is one of many technology companies moving swiftly to position themselves as a dominant player in the AI space, where investment has been bolstered with the creation of generative AI tools.

The company has already taken steps to capitalize on GenAI’s potential, announcing a $2 billion investment in AI startup Anthropic — a rival of ChatGPT creator OpenAI — last October. In December, the company announced its own ChatGPT competitor, Gemini, its “largest and most capable” AI model to date, according to a blog post.

In its bid to become a top player in the space, Google will spend over $100 billion developing AI over time, Google DeepMind CEO Demis Hassabis said Monday during a TED conference in Vancouver, Canada, Bloomberg reported.

As it moves forward with its AI plans, Google’s investments in the technology have also occurred alongside wide-scale workforce and real estate strategy shifts by the business. The most recent restructuring of its finance team comes after approximately 1,000 employees were let go from Google’s hardware, core engineering and Google Assistant teams this January, according to a report by The Verge at the time.

In January, the company announced it would be eliminating 12,000 roles across its global workforce, according to a memo posted by CEO Sundar Pichai.

“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI,” Pichai wrote at the time. “To fully capture it, we’ll need to make tough choices.”

Alphabet recorded severance costs of $2.1 billion for 2023 related to the layoffs, as well as $1.8 billion in exit charges relating to its decision to reduce its office space, the company announced in its full year earnings release.

Google is far from the only technology company that has conducted layoffs in recent years; the tech exodus that began in 2022 continued throughout 2023 and has bled into 2024 — overall in 2023, technology companies laid off 263,180 employees, according to Layoffs.fyi, a website that tracks workforce reductions in the space. So far this year, tech firms have dismissed 74,672 employees, with companies including Apple, electric car manufacturer Tesla and e-commerce titan Amazon announcing new rounds of layoffs this month.

Google, Apple and Tesla are joining the ranks of other businesses such as Microsoft and Cisco that have also reduced their workforce this year, with the continued spotlight on AI’s potential playing a large role in the trend, according to report by The Hill. Technology firms are also grappling with high interest rates, which has narrowed the pool of available funding in the space as investors search for safer bets.  

Google did not immediately respond to requests for comment.