Google cuts hundreds of ‘Core’ workers, moves jobs to India, Mexico

Sundar Pichai, chief executive officer of Alphabet Inc., during Stanford’s 2024 Business, Government, and Society forum in Stanford, California, US, on Wednesday, April 3, 2024.

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Just ahead of its blowout first-quarter earnings report on April 25, Google laid off at least 200 employees from its “Core” teams, in a reorganization that will include moving some roles to India and Mexico, CNBC has learned.

The Core unit is responsible for building the technical foundation behind the company’s flagship products and for protecting users’ online safety, according to Google’s website. Core teams include key technical units from information technology, its Python developer team, technical infrastructure, security foundation, app platforms, core developers, and various engineering roles.

At least 50 of the eliminated positions were in engineering at the company’s offices in Sunnyvale, California, filings show. Many Core teams will hire corresponding roles in Mexico and India, according to internal documents viewed by CNBC.

Asim Husain, vice president of Google Developer Ecosystem, announced news of the layoffs to his team in an email last week. He also spoke at a town hall and told employees that this was the biggest planned reduction for his team this year, an internal document shows.

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

Alphabet has been slashing headcount since early last year, when the company announced plans to eliminate about 12,000 jobs, or 6% of its workforce, following a downturn in the online ad market. Even with digital advertising rebounding recently, Alphabet has continued downsizing, with layoffs across multiple organizations this year.

Chief Financial Officer Ruth Porat announced in mid-April that the company’s finance department would undergo restructuring, entailing layoffs and moving positions to Bangalore and Mexico City. The company’s search boss, 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 US

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

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

The teams involved in the reorganization have been key to the company’s developer tools, an area Google is streamlining as it incorporates more artificial intelligence into the products. In February, Google announced a major rebrand of its chatbot from Bard to Gemini, the same name as the suit of AI models that power it.

Alphabet is gearing up for its annual developer conference, Google I/O, on May 14, where the company traditionally reveals new developer products and tools underway during the previous year. Husain said in a memo explaining the developer changes 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 a separate email, Pankaj Rohatgi, Google’s security engineering vice president, told his team, “In order to optimize for our business goals, we are expanding work to other locations, which will result in some role eliminations and proposed role eliminations.”

The Core layouts also include the governance and protected data group, which will be at the center of regulatory challenges facing the company, particularly as lawmakers across the globe focus more on developments in AI. The European Union’s Digital Markets Act, which went into effect in March, aims to clamp down on anti-competitive practices in tech.

Evan Kotsovinos, Google’s vice president of governance and protected data, addressed the upcoming changes last week.

Kotsovinos in an email said the team’s success means responding to “escalating regulatory focus” and is contingent on “moving faster.”

Raghavan, Google’s senior vice president overseeing search, recently referenced increased competition, a more challenging regulatory environment, and slower organic growth as the company’s “new operating reality.”

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

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

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