Giant tech company Google has recently laid off at least 100 of its workforce across its fast-growing cloud unit.
Reports reveal that the company notified employees of the proposed laid-off plan, with roles being eliminated in sales, consulting, go-to-market strategy, operations, and engineering.
A spokesperson at Google said the job cuts are crucial to better align its go-to-market organization.
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The spokesperson said,
“As we have shared before, we continue to evolve our business to meet our customer’s priorities and the significant opportunity ahead. We maintain our commitment to investing in areas that are critical to our business and ensure our long-term success”.
Google Cloud, a division of Alphabet Inc., provides a suite of cloud computing services that runs on the same infrastructure that Google uses internally for its end-user products, such as Google Search, Gmail, and YouTube.
Established as a significant player in the cloud computing industry, Google Cloud offers a wide range of services including computing, storage, data analytics, and machine learning.
Revenue in Google Cloud, which houses much of the company’s AI technology, jumped 28% from a year earlier to $9.57 billion, sailing past estimates. Operating income more than quadrupled to $900 million, showing that Google is finally generating substantial profits after pouring money into the business for years to keep up with Amazon Web Services and Microsoft Azure.
However, the Google Cloud is currently facing significant pressure as competition in the artificial intelligence (AI) sector intensifies. Despite its robust infrastructure and advanced AI capabilities, the cloud unit is up against formidable rivals such as Amazon Web Services (AWS), Microsoft Azure, and emerging players who are aggressively innovating and expanding their AI offerings.
It is understood that Google has been laying off some of its workforce since last year, as it focuses on core areas, investing in its biggest priorities with continuous hiring in those areas. Just ahead of its blowout first-quarter earnings report on April 25, the company laid off at least 200 employees from its “Core” teams, in a reorganization that will include moving some roles to India and Mexico.
The cuts at the company’s core team come as it enjoys its fastest growth rate since early 2022, alongside improving profit margins. However, in May 2024, Google CEO Sundar Pichai announced that there will likely be fewer layoffs in the second half of 2024.
The company’s Chief Financial Officer Ruth Forat last month April, disclosed via a memo that Google is restructuring its finance organization, a move that will include layoffs and relocations, as the company pushes resources to favor investments in artificial intelligence.
With the tech sector in the midst of a tremendous platform shift with Al, Google is on a mission to make more helpful products for billions of users and provide faster solutions to customers, but this also means the company will have to make tough decisions, such as job cuts to align with its top priority areas.
Notably, broader cuts by Google are to allocate resources to key areas to accommodate further investment in new technologies such as AI as advertising growth slows.