Google Spent $2.1 Billion to Lay off Over 12,000 Employees

As revealed in Alphabet’s Q4 earnings release, Google spent a whopping $2.1 billion on severance and related expenses during its extensive employee layoffs throughout 2023, The Verge reports.

An additional $700 million has been earmarked for the same purpose in the early days of 2024, impacting over 1,000 roles. Despite the substantial layoffs, Google experienced positive growth across key business sectors.

The fourth quarter of 2023 saw a 13% year-over-year increase, bringing the revenue to $86 billion. The search engine giant’s core digital advertising and cloud computing segments exhibited consistent growth, attributed to strategic investments in generative AI, according to CEO Sundar Pichai.

Google’s primary revenue driver, the search engine business, contributed $48 billion, marking an impressive nearly 13 percent YoY surge.

Subscription services and devices, driven by YouTube Premium, Music, YouTube TV, and Google One, generated $10.7 billion. YouTube’s advertising revenue showed a 15% spike, reaching $9.2 billion.

Pichai, during an investor call, referred to 2024 as Alphabet’s “Gemini era,” emphasizing the company’s focus on its AI language model. Gemini Ultra, an updated version of the original model, is in development and expected to integrate with various Google products, starting with Search.

While Google currently ranks as the third-largest cloud provider globally, its cloud division gained momentum in 2023. Google Cloud reported a substantial 25.6% YoY revenue increase, reaching $9.19 billion.

Despite the considerable expenses incurred due to layoffs, Google also grappled with the financial implications of real estate cutbacks, especially in high-cost areas like the Bay Area.

The closure of physical office spaces resulted in a total expenditure of $1.8 billion in 2023.