Google cuts hundreds of ‘core’ employees, shifts jobs to India and Mexico

Just before releasing its first-quarter earnings report last week, Google has laid off at least 200 employees from its “core” teams, as part of a reorganization that will include moving some positions to India and Mexico, CNBC has learned.

Google’s core unit is responsible for building the technical foundations of the company’s flagship products and protecting users’ online security, according to Google’s website. The core teams include key IT technical units, its Python developer team, technical infrastructure, security foundation, application platforms, core developers, and various engineering roles.

At least 50 of the eliminated positions were in engineering at the company’s offices in Sunnyvale, Calif., according to filings. Many core teams will hire for corresponding positions in Mexico and India, according to internal documents seen by CNBC.

Asim Husain, vice president of Google Developer Ecosystem, announced some of his team’s layoffs in an email last week. He also spoke at a town hall meeting and told employees this was the largest reduction planned for his team this year, according to an internal document.

“We intend to maintain our current global footprint while expanding into high-growth global workforce areas so that we can operate closer to our partners and developer communities,” Husain wrote in the ‘E-mail.

Alphabet has been reducing its workforce since early last year, when the company announced plans to cut about 12,000 jobs, or 6% of its workforce, following a slowdown in the online advertising market. Even with the rebound in digital advertising over the past two quarters, Alphabet has continued to reduce its workforce, with layoffs across several organizations this year.

Chief Financial Officer Ruth Porat announced a restructuring of the company’s finance department in mid-April, which included layoffs and position transfers in Bangalore and Mexico City. The company’s head of research, Prabhakar Raghavan, told employees at an all-hands meeting in March that Google plans to build teams closer to users in key markets, including India and Brazil, where labor is cheaper than in the United States.

The latest cuts come as the company experiences its fastest growth rate since early 2022, alongside improving profit margins. Last week, Alphabet reported a 15% increase in first-quarter revenue from a year earlier and announced its first-ever dividend and a $70 billion buyback.

“Announcements like this may leave many of you uncertain or frustrated,” Husain wrote in the email to developers. He added that his message to developers is that the changes “serve our broader goals” as a company.

The teams involved in the reorganization played a key role in the company’s development tools, an area being streamlined by Google as it integrates more AI into products. In February, Google announced a major name change for its chatbot from Bard to Gemini, the same name as all of the AI ​​models that power it.

Alphabet is gearing up for its annual developer conference, Google I/O, on May 14, where the company traditionally unveils new products and developer tools rolled out over the previous year. Husain said in a note explaining the changes to developers that generative AI is at an “inflection point.”

“Recent advances in generative AI across the industry, including Google’s Gemini, are changing the very nature of software development as we know it,” Husain wrote.

In another email, VP of Security Engineering Pankaj Rohatgi told his team: “In order to optimize our business goals, we are expanding the work to other locations, which will result in some role deletions and proposals for role deletions. »

The core layoffs also include the Governance and Protected Data group, which will be at the center of the regulatory challenges the company faces, especially as lawmakers around the world focus more on AI developments. The European Union’s Digital Markets Act (DMA) came into force in March and aims to crack down on anti-competitive practices in the technology sector.

Evan Kotsovinos, Google’s vice president of governance and protected data, wrote about the upcoming changes in an email last week.

Kotsovinos said the team’s success requires responding to “increasing regulatory attention” and depends on “moving faster.”

Raghavan, senior vice president of search at Google, recently referred to increased competition, a tougher regulatory environment and slower organic growth as the company’s “new operating reality.”

Google confirmed the Core reorganization and layoffs, and a spokesperson told CNBC that employees will be able to apply for open positions within Google and access outplacement services.

“As we have said, we are investing responsibly in our company’s highest priorities and the significant opportunities ahead,” the spokesperson said in an email. “A number of our teams have made changes to become more efficient and work better, removing layers and aligning their resources with their biggest product priorities.”

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