Google to lay off hundreds of employees as sales team adopts AI: report

Google will lay off several hundred employees on its advertising-sales team in another round of cost-cutting measures, the company said. 

The layoffs come as Google plans to restructure its advertising-sales unit, reducing a team that focuses on large clients while expanding teams dedicated to small and medium businesses.

“Every year we go through a rigorous process to structure our team to provide the best service to our Ads customers,” a Google spokesperson told FOX Business. “We map customers to the right specialist teams and sales channels to meet their service needs. As part of this, a few hundred roles globally are being eliminated and impacted employees will be able to apply for open roles on the team or elsewhere at Google.”

In a memo to staff, first reported by Business Insider, Chief Business Officer Philipp Schindler wrote that hundreds of people will be let go as Google restructures its advertising-sales unit.

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Google plans to restructure its advertising-sales unit as a cost-cutting measure. (Marlena Sloss/Bloomberg via Getty Images / Getty Images)

Google plans to move staff from large-customer sales, a team that focuses on large advertising clients, to its Google customer-solutions team, which services small and medium-level clients. Current and former employees told Business Insider the shift comes as some of Google’s large clients do not need access to as many of the company’s resources. 

The spokesperson said the shift is not unusual and, while larger than a similar restructuring during the pandemic, not unprecedented. 

“Going forward GCS will be our core channel for scaling growth by dynamically delivering the right treatment to every customer — while LCS will focus on transformational growth for our largest, most sophisticated customers,” Schindler wrote in the memo reported by Business Insider. 

“While I’m confident we’re doing the right thing for our customers, partners, and ultimately for our business, this will be very hard for many, especially across our LCS teams,” he added later. 

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In this photo illustration, the Google Bard logo is seen. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)

The layoffs, which mostly impact the large customer sales team, are not related to AI, according to Google. 

Earlier this month, Google announced that a few hundred employees working on the company’s voice assistant unit and another few hundred people working on the augmented reality hardware team would be laid off. A few hundred roles within its central engineering team are also impacted. 

“We’re responsibly investing in our company’s biggest priorities and the significant opportunities ahead,” a Google spokesperson told FOX Business. “To best position us for these opportunities, throughout the second half of 2023, a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities.” 

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Sundar Pichai, CEO of Google Inc., speaks during an event in New Delhi on Dec. 19, 2022. (SAJJAD HUSSAIN/AFP via Getty Images / Getty Images)

Google’s layoffs come as tech firms including Amazon, Microsoft and Meta seek to maximize operational efficiency to compete in the AI space. Last month, Google rolled out its latest AI software, Gemini, which seeks to compete with Microsoft-backed OpenAI’s GPT-4 model and Amazon’s in-development “Olympus” software.  

Amazon laid off several hundred employees in its streaming and studio operations last week. Hundreds of jobs were also cut in its Twitch live-streaming platform and Audible audiobook unit, according to media reports.

Overall, tech firms have let go more than 7,500 employees so far in January, according to tracking website Layoffs.fyi.

“No company wants to get left behind by the AI revolution and they are all making sure they have these capabilities and are prioritizing them, even when it is at the expense of other initiatives,” D.A. Davidson & Co analyst Gil Luria told Reuters. 

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The layoffs at Google come a year after CEO Sundar Pichai announced that the company was in the process of reducing its workforce by 12,000 roles amid the tough economic environment. 

Those cuts also affected teams globally, including recruiting and some corporate functions, as well as some engineering and products teams.  

Editor’s note: This report has been updated for clarity.

FOX Business’ Daniella Genovese, Breck Dumas and Reuters contributed to this report.