Google parent to lay off 12,000 workers as AI focus intensifies

Jan 20 (Reuters) – Google’s parent Alphabet Inc (GOOGL.O) is chopping about 12,000 jobs, or 6% of its workforce, it mentioned in a workers memo Friday, as the expertise sector reels from layoffs and corporations stake their futures on synthetic intelligence (AI).

Alphabet’s shares have been up practically 4% in morning commerce.

The cuts come at a fragile second for the U.S. firm, which has lengthy been the chief in key areas of AI analysis.

Alphabet now faces a problem from Microsoft Corp (MSFT.O) in a department of tech that may, as an example, create nearly any content material a consumer thinks up and kinds in a textual content field. Industry observers mentioned so-called generative AI could take a look at Google’s dominance in web search after a Microsoft-backed startup, OpenAI, launched a chatbot recognized as ChatGPT that may reply queries with human-like responses.

Microsoft this week mentioned recession worries have been forcing it, too, to shed 10,000 jobs, lower than 5% of its workforce, however it will focus on imbuing its merchandise with extra AI going ahead. Alphabet’s CEO Sundar Pichai echoed the sentiment in his layoff memo.

Alphabet confronted “a different economic reality” from the previous two years when it quickly expanded headcount, choices for which Pichai mentioned he took “full responsibility.”

Pichai grew to become Alphabet CEO in 2019.

Still, he mentioned, Google was gearing up “to share some entirely new experiences for users, developers and businesses,” and the corporate has “a substantial opportunity in front of us with AI across our products.”

The firm has been engaged on a significant AI launch, two folks conversant in the matter instructed Reuters. One of the sources mentioned it will happen within the spring of this 12 months. The New York Times additionally reported that Google deliberate to unveil greater than 20 new merchandise and a search engine together with chatbot options.

Susannah Streeter, an analyst with Hargreaves Lansdown, mentioned promoting, the important thing enterprise underpinning Google’s search engine and YouTube, was not immune to financial turbulence.

“Ad growth has come off the boil, a sharp contrast from the busy days of the post-pandemic re-opening which saw a surge in consumer spending,” she mentioned. The firm faces aggressive and regulatory threats as effectively, she mentioned.

It was unclear if Alphabet would take a one-time monetary cost associated to the job cuts. Microsoft’s severance packages, lease consolidation and hardware-lineup modifications will price the corporate greater than $1 billion, it mentioned earlier this week.

More than 38,000 tech-industry workers have confronted layoffs this 12 months alone, after practically 155,000 misplaced their jobs in 2022, monitoring web site Layoffs.fyi acknowledged. Companies chopping 1000’s of workers have included Amazon.com Inc (AMZN.O), Meta Platforms Inc (META.O) and Salesforce Inc (CRM.N).

Alphabet’s layoffs adopted a evaluate of its folks and priorities, main to a workforce discount hitting numerous geographies, Pichai mentioned. Among these dropping their jobs are recruiters, company workers and folks engaged on engineering and product groups, he added.

In the United States, the place Alphabet has already emailed affected staff, workers would obtain severance and 6 months of healthcare as effectively as immigration help. Alphabet relies in Mountain View, California.

One one who mentioned he labored on Google’s Chrome browser posted on Twitter that he had misplaced his job even as he stepped right into a management place on a venture.

Overseas, layoff notifications will take longer due to native employment legal guidelines and practices, Pichai mentioned within the memo.

Reporting by Jeffrey Dastin in Davos, Switzerland, Akash Sriramand Deep Vakil; Editing by Elaine Hardcastle, Alexander Smith and Nick Zieminski

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