Google’s Treasured AI Unit Gets Swept Up in 12,000 Job Cuts

(Bloomberg) — Alphabet Inc. is reorganizing its treasured artificial intelligence unit as part of the company’s sweeping job cuts announced on Friday, according to an internal memo.

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Jeff Dean, the executive who leads Google’s artificial intelligence and research efforts, said that apart from a “modest number” of reductions across the research unit, the company had determined it was over-invested in its data platform for care teams, called Google for Clinicians. The robotics unit will also see consolidation across Alphabet and Google, he said.

Alphabet announced earlier on Friday that it will cut about 12,000 jobs, more than 6% of its global workforce, becoming the latest tech giant to retrench after years of abundant growth and hiring. Chief Executive Officer Sundar Pichai told employees the cuts will affect jobs globally and across the entire company. At the same time, Pichai singled out AI as a “key investment area” where the company is facing a recent surge in competition.

Dean cited ongoing challenges with the current economic climate as the reason for the staffing reductions. “As a company and an organization, we have to get laser focused on the priority areas we want to invest in,” Dean said. “We must continue to focus on long-term, ambitious research and development that will help us create revolutionary products for billions of people.”

Responding to a request for comment on the job cuts in the AI and research units, company spokesperson Jason Freidenfelds pointed to the “breadth of progress and ambitious scope” of Google’s AI efforts.

Dan Morgan, a senior portfolio manager at Synovus Trust Co., said Google’s reductions to its AI staff is “eye-catching” and “somewhat perplexing,” given that the technology forms the backbone of Google Search, its dominant product.

“These changes must be evaluated more closely,” Morgan said, “and tells me that the slowdown in ad revenues is trickling through the rest of the company.”

Google has long been seen as the industry leader in artificial intelligence technology. Pichai once called the field more profound than fire or electricity. But Google has also faced existential threats from outsiders, with the latest challenge coming in the form of an experimental chatbot called ChatGPT from the research lab OpenAI, which could be getting a significant investment from Microsoft Corp.

The platform, which can serve up information in clear sentences given a simple prompt, reportedly prompted Google’s management to declare a “code red” within the company. Google has so far declined to introduce its own competitive technology in the field, though it is working on similar chatbot efforts.

Dean emphasized in the memo that Google remains committed to advancing AI, and reassured staffers that the Research unit was central to those efforts. “Even in just the last year or so, together we’ve made great strides in our core research on advancing AI and other important areas,” he said. “We have a focused and very ambitious, if not audacious, long-term research agenda to focus on ahead of us.”

(Updates with analyst comment in sixth paragraph.)