In a major move towards efficiency, Google has axed 10% of its managerial staff, which includes the managerial, director, and vice president level. The decision was announced by its CEO Sundar Pichai at the all-hands meeting on Wednesday, which further carries the momentum of this search engine giant to further cut down on unnecessary fat in their workforce.
A Google spokesperson explained to Business Insider that for some affected workers, their role transitions meant taking on the mantle of individual contributors, whereas the others faced outright role eliminations. This new round of cuts follows an aggressive pace in AI development, particularly with increased innovations from competitors like OpenAI, whose recent improvements start to threaten the relevance of Google Search responsible for over 57% of its revenue last year.
The competitive pressures are now pushing Google to embed generative AI features into its products, including the recent release of Gemini 2.0, the most advanced AI model the company has released. According to Pichai, this model brings “a new agentic era” into view, in which AI is designed to understand and make decisions autonomously.
The stock of Google has jumped by more than 4% on Wall Street after the announcement of Gemini 2.0, building on the 3.5% gain that followed news of a revolutionary quantum chip.
These layoffs mark the fourth round of cuts this year after the company shed “a few hundred” positions from the global advertisements team in January and another 100 jobs from the cloud unit in June. Google’s efficiency initiative, launched in September 2022, has already led to the removal of more than 12,000 roles, or 6.4% of its global workforce, by January of last year.
In an earlier open letter to employees, Pichai took “full responsibility” for the tough decisions, while acknowledging that such a course of action was necessary after a period of tremendous growth. He said the decision came after a thorough efficiency review across various product areas and functions in Alphabet.
Pichai also acknowledged that the company might have handled the layoffs better, as it faced difficult times never seen in the history of Google.
During the same meeting, he tackled the need to change corporate culture and redefine “Googleyness,” which itself is a term that has grown up and changed over time and with the qualities it hopes to find in applicants. It reflects the company’s seriousness of going with the new realities facing its business.
