Google is cutting staff to reduce costs in order to further invest in AI

Google has informed its employees in the human resources and cloud technology departments of its intentions to make cuts as part of an internal reorganization aimed at reducing costs, CNBC reports.

According to a letter sent by HR chief Fiona Cicconi, the company has offered voluntary redundancy to HR staff, with the programme set to start in early March 2025. Mid-level and senior-level employees can receive severance pay of 14 weeks' salary plus an additional week for each full year of service.

Google's new layoff initiative comes after CFO Anat Ashkenazi announced that the company would focus on cutting costs in 2025 to increase investment in artificial intelligence. During the financial report, Ashkenazi noted that despite lower-than-expected revenue, demand for AI products far outstrips supply.

At the same time, Google has made cuts to its cloud division, mostly affecting support staff. The layoffs include sales, user experience, and other roles. Some roles will be moved to Mexico and India, but most employees will remain in the United States.

The total number of laid-off employees is not disclosed, but Google says the layoffs affected a small percentage of employees and that the company will continue to hire new people for critical positions in sales and development.

"Our teams have continued to make changes to operate more efficiently, remove layers, and ensure they are set up for long term success. This work is ongoing as we continue to invest in our company’s biggest priorities and the significant opportunities ahead," a company spokesperson told CNBC.

We remind you that at the end of January, Google also offered voluntary redundancy to employees in the Platform & Devices department who work on Android and Pixel devices.