Google spent billions of dollars to lay people off

Google spent $2.1 billion on severance and different bills because it laid off greater than 12,000 workers over the course of 2023. And the layoff fees maintain coming: in simply the one month of 2024 thus far, the corporate has already spent $700 million on worker severance fees as a part of layoffs concentrating on one other 1,000-plus roles. Alphabet, Google’s mother or father firm, revealed the determine alongside its fourth-quarter earnings launch on Tuesday.

Regardless of the cuts, Google ended 2023 with development throughout most of its core enterprise strains. Google posted $86 billion in income for the fourth quarter of 2023, a 13 % enhance 12 months over 12 months. The search large’s core digital advertisements and cloud computing companies additionally confirmed regular development, which CEO Sundar Pichai credited to Google’s investments in generative AI.

Google’s main income generator, its search engine enterprise, generated $48 billion, an almost 13 % leap 12 months over 12 months. The corporate’s subscription companies and gadgets phase generated $10.7 billion, thanks primarily to subscriptions to YouTube Premium and Music, YouTube TV, and Google One, in keeping with Pichai. YouTube’s promoting income was $9.2 billion, a 15 % spike from final 12 months.

On a name with traders, Pichai referred to 2024 as Alphabet’s “Gemini period,” referring to the corporate’s AI language mannequin that it expects to work throughout all of Google’s core merchandise. “Gemini is the primary realization of the imaginative and prescient we had after we shaped Google DeepMind, bringing collectively our two world-class analysis groups,” Pichai mentioned. Coming across the bend is Gemini Extremely, an replace of the unique mannequin which the corporate remains to be engaged on. “Gemini Extremely is coming quickly. The staff is already engaged on the following model and bringing it to our merchandise, beginning with Search.”

Google is presently the third-largest cloud supplier on the earth, trailing behind Microsoft’s Azure and AWS. However the cloud division picked up steam final 12 months. The corporate reported $9.19 billion in income for Google Cloud, a substantial increase of 25.6 % 12 months over 12 months.

Though layoffs price Google a reasonably penny, so did the actual property cutbacks on account of mentioned layoffs (together with in places just like the expensive Bay Space). Shutting down bodily workplace area price Google a complete of $1.8 billion for the whole lot of 2023.

And Google’s continued investments in AI, or its “Gemini period,” implies that much more layoffs are to observe in 2024 as the corporate makes cuts in different divisions to compensate.