Google spends billions on massive layoffs

February 1, 2024  10:31

In 2023, Google laid off more than 12,000 employees, costing the company $2.1 billion. The bills for the layoffs continue to accumulate: in just one month of 2024, the company spent $700 million on severance packages and other expenses related to further reductions, affecting over a thousand people. These figures were disclosed by Alphabet, the parent company of Google, during the financial results report for the fourth quarter.

Despite the layoffs, Google concluded 2023 with growth in most of its core business areas. The company's revenue increased by 13% annually to reach $86 billion. Digital advertising and cloud computing sectors demonstrated sustainable growth, which Google's CEO Sundar Pichai attributed to investments in generative artificial intelligence.

Google's primary search sector generated $48 billion, almost 13% more than the previous year; the subscription services and devices segment brought in $10.7 billion, mainly through YouTube Premium and Music, YouTube TV, and Google One; YouTube's advertising revenue grew by 15% to $9.2 billion.

Sundar Pichai referred to 2024 as the "era of Gemini" for Alphabet, alluding to the large language model Gemini, which will be integrated into all major Google products. Google is also the third-largest cloud services provider globally after AWS and Microsoft Azure, with Google Cloud revenue growing by 25.6% year over year, reaching $9.19 billion.

The massive layoffs incurred significant expenses for Google, but the costs associated with former employees did not stop there. In 2023, the company spent $1.8 billion on closing office spaces. The widespread implementation of Gemini will require the continuation of the layoff program, leading to further expenditures. 

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