Google slashes over 1,000 jobs to focus on AI amid competition with Microsoft, OpenAI

Alphabet’s Google is laying off hundreds of people working on its digital assistant, hardware and engineering teams as part of a continued effort to lower costs and focus on artificial intelligence (AI).

The affected employees included those working on the voice-based Google Assistant and the augmented reality hardware team. The central engineering organisation was also hit by cuts, the company said.

The reductions come as Google’s core internet search business feels the heat from the AI offerings of rivals Microsoft and ChatGPT-creator OpenAI. On calls with investors in recent months, Google executives pledged to scrutinise their operations to identify places where they can make cuts, and free up resources to invest in their biggest priorities.

“Throughout the second half of 2023, a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities,” a spokesperson for the Mountain View, California-based company said in a statement. “Some teams are continuing to make these kinds of organisational changes, which include some role eliminations globally.”

Alphabet shares were little changed on Thursday, closing at US$142.08 in New York.

The cuts struck both rank-and-file employees and executives. Disclosures filed by Google with the state of California show that 630 workers in the state have been let go this week, including four vice-presidents and 25 directors. Employees at those levels often earn millions of dollars per year in compensation, according to a person with knowledge of the matter.