Google to Cut at Least 100 Employees in 'High-Growth' Cloud Division

Alphabet, Google's parent company, which is expanding its investment in artificial intelligence (AI), will lay off at least 100 employees in its cloud division, which has experienced high growth so far.

[Image source=Reuters Yonhap News]

According to the economic media CNBC on the 3rd (local time), Alphabet informed employees last week that jobs in sales, consulting, go-to-market strategy, operations, and engineering within the cloud division would be eliminated. A source explained that this restructuring measure would result in the loss of at least 100 jobs. Some of those affected by the layoffs were identified as participants in Google's annual event Cloud Next held in mid-April.

An Alphabet spokesperson confirmed to CNBC that "we continue to evolve the business to meet customer priorities and important future opportunities," describing the layoffs as a gradual reduction in workforce as part of organizational streamlining.

The cloud division targeted for restructuring is considered the fastest-growing business within Google. Its operating profit last quarter was $900 million, more than quadrupling. CNBC reported that this was the result of Google pouring money into the business for years to catch up with Amazon Web Services (AWS) and Microsoft (MS) Azure. However, as competition around AI intensifies, the growth pressure on the cloud division is also believed to have increased.

Google Alphabet has been continuously implementing layoffs since early last year. CNBC reported that this has led to complaints among employees that despite record profits, they have to work with fewer resources under tighter deadlines and that promotion opportunities are decreasing.

Last month, layoffs targeted at least 200 core department personnel, including developers. CEO Sundar Pichai said that the scale of these layoffs would decrease in the second half of 2024.

Meanwhile, on the same day, MS was also reported to have conducted layoffs in its Azure cloud and mixed reality (MR) divisions. This is a follow-up to MS's announcement last year of a restructuring plan involving 10,000 employees. A source told Business Insider that up to 1,500 people could be laid off from the Azure for Operators team alone.