Google parent Alphabet will reportedly lay off dozens of workers in a secretive division that develops new technology as part of the search giant’s broader cost-cutting push.
In recent months, the division, called X Lab, has been in talks with venture capitalists, sovereign wealth funds and private equity firms on funding, people familiar with the matter told Bloomberg.
Getting outside funding would allow X Lab projects to be spun out more easily, functioning as independent startups with support from Alphabet and other investors, one of the people told Bloomberg, which also viewed a company email on the topic.
The innovation lab has worked on high-tech projects like Wing, which consists of delivery drones; Loom, an internet network of balloons; and Makani, kites that generate wind energy.
“X tackles global challenges like climate change and connectivity and we continually look for ways to streamline how we bring our moonshots to life,” a spokeswoman for the division told Reuters.
The move comes days after Google said it would lay off hundreds of employees in its advertising sales team and its hardware, Voice Assistant and augmented reality teams amid its aggressive campaign to cut costs and improve efficiency.
Few of X’s projects have turned into durable businesses, Bloomberg reported. Perhaps the most widely known of its endeavors is Waymo, a fleet of autonomous vehicles standing for “Way Forward in Mobility.”
“We’re expanding our approach to focus on spinning out more projects as independent companies funded through market-based capital,” Astro Teller, who leads X, wrote in the email.
“We’ll do this by opening our scope to collaborate with a broader base of industry and financial partners, and by continuing to emphasize lean teams and capital efficiency,” Teller added, per Bloomberg.
As part of its restructuring, X is laying off dozens of employees, Bloomberg reported, though it wasn’t immediately clear how many positions will be affected by the headcount reduction.
The layoffs are focused on support staff, one person with knowledge of the cuts told Bloomberg.
Representatives for X Lab did not immediately respond to The Post’s request for comment.
X Lab, which has been described as a “semi-secret research and development facility,” was launched in 2010 by Google co-founders Larry Page and Sergey Brin.
In recent years, the lab — which is based out of Google’s corporate headquarters, the Googleplex, in Mountain View, Calif. — has come to be known as X, with increased pressure to turn its speculative projects into profitable businesses as Alphabet looks to cut costs across the board.
So far this month, Google has already confirmed layoffs across multiple parts of its empire –including several hundred job cuts on its ad sales team and more than 1,000 combined workers in other units, including its core engineering team and the hardware division responsible for devices such as the Pixel, Nest and Fitbit.
The job cuts marked a rough start to the year for Google’s workforce, whose headcount was reduced by more than 12,000 throughout 2023.
Unsurprisingly, Alphabet CEO Sundar Pichai has identified “durable cost savings” among the tech giant’s key goals in 2024.
Pichai hinted at further belt-tightening plans as part of a list titled “2024 company-wide OKRs,” or objective key results, that Google shared with its employees on Thursday last week.
“Improve company velocity, efficiency, and productivity, and deliver durable cost savings,” said one of the seven stated goals, according to a copy obtained by the Verge.
The top goal on Google’s list was to “deliver the world’s most advanced, safe, and responsible AI.” The memo also mentioned boosting innovation through Google Cloud services and building “the most helpful personal computing platforms and devices.”
The note expands upon a companywide memo Pichai sent out the evening prior, which boasted the headline “2024 priorities and the year ahead,” suggesting that more job cuts are pending.
“We have ambitious goals and will be investing in our big priorities this year,” likely referring to the artificial intelligence race, according to CNBC.
The note comes a month after Google introduced Gemini, its most advanced AI model yet that’s reportedly “capable of more specific reasoning.”
“The reality is that to create the capacity for this investment, we have to make tough choices,” Pichai wrote, warning that this means some teams will be “removing layers to simplify execution and drive velocity,” per the memo.
Pichai said the looming “role eliminations are not at the scale of last year’s reductions, and will not touch every team.” He added, however, that “to be upfront, some teams will continue to make resource allocation decisions,” according to CNBC.
