Google Follows Amazon in Slashing Jobs. Why AI Is Getting the Blame.

Google-parent
Alphabet
cut employees in multiple teams including those working on Google’s Assistant program, hardware, and internal software tools, the company said Wednesday. The exact size of the layoffs was unclear.

The blow looks to have landed particularly hard on Google’s hardware operations, including its augmented reality and voice-activated technology teams. The co-founders of Fitbit, James Park and Eric Friedman, are leaving the company as part of the reorganization, Google said. Google completed its $2.1 billion acquisition of Fitbit in 2021.

With spending shifting toward artificial-intelligence technology, the pressure is on technology companies to find savings elsewhere. Google’s move comes after
Amazon
cut hundreds of jobs at its film and television studios, and at Twitch, its videogame-streaming platform.

Despite excitement over the potential start of interest-rate cuts this year, tech companies are still facing a more difficult funding environment and a projected slowdown in U.S. and global growth in 2024.

“Tech companies may be more likely to make deep cuts and more quickly divest of strategies that aren’t producing growth or profitability,” Macquarie analyst Frederick Havemeyer wrote in a recent research note.

However, the scale of job cuts isn’t expected to match the mass layoffs announced last year. Amazon laid out plans to cut 27,000 jobs in total early in 2023, while
Alphabet
said it would cut 12,000 positions in January last year.

Alphabet had 182,381 employees at the end of September, according to regulatory filings, compared with as many as 190,711 workers before the layoffs last year.

Alphabet shares were up 0.3% in early trading on Thursday while Amazon shares were up 0.6%. Among other major technology companies,
Microsoft
stock ticked 0.4% higher, and
Apple
was down 1.2%.

Write to Adam Clark at [email protected]