Google Implements Layoffs In HR And Cloud Divisions As AI Investment Accelerates: Report

Alphabet Inc.‘s GOOGL GOOG subsidiary Google is implementing new layoffs in its human resources and cloud divisions as part of ongoing cost-cutting efforts while it increases investment in artificial intelligence infrastructure.

What Happened: The company will offer voluntary buyouts to U.S.-based employees in its “People Operations” division starting in March, according to an internal memo from HR chief Fiona Cicconi viewed by CNBC. Mid to senior-level employees may receive severance packages of 14 weeks’ salary plus one additional week for each year of service.

Separately, Google’s cloud unit is facing layoffs primarily affecting operations support staff. Some roles are being relocated to India and Mexico City, though the company stated its largest employee presence for cloud will remain in the U.S.

Google did not immediately respond to Benzinga's request for comment.

See Also: Rocket Lab Q4 Earnings: Revenue Beat, EPS Beat, New Satellite Product, Multi-Launch Agreement, Shares Slide On Soft Guidance

Why It Matters: The cloud division, which saw 30% revenue growth in the fourth quarter compared to the previous year, remains a high-growth business unit benefiting from AI products. Alphabet has been generating profit from its cloud business while competing with market leaders Amazon Web Services and Microsoft Azure.

These reductions follow comments from CFO Anat Ashkenazi, who recently identified cost-cutting as a top priority while Google expands AI infrastructure spending in 2025. After reporting fourth-quarter revenue that missed expectations on Feb. 3, Ashkenazi noted Google “exited the year with more demand than we had available capacity” for AI products.

These latest cuts follow January’s announcement of buyout offers to employees in Google’s “Platforms and Devices” unit, which houses over 25,000 full-time employees working on products including Android, Chrome, Pixel, and Nest.

Price Action: Alphabet Inc. Class A closed at $168.50, down 2.45%, and dipped to $168.38 after hours on Thursday. Class C ended at $170.21, down 2.57%, slipping to $170.16 after hours, according to data from Benzinga Pro.

Read Next:

• Mark Zuckerberg’s Meta Wants To Do An AI App But Sam Altman Wants To Pull A ‘Reverse Uno’ Card: ‘Maybe We’ll Do A Social App’

Image Via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.