Nothing like doing layoffs during a pivot to AI.

Core Sample

Google is gutting hundreds of workers from its "Core" team and replacing their jobs with cheaper international labor as it continues its pivot to AI.

As CNBC reports, the search giant laid off at least 200 people ahead of an April 25 quarterly earnings call that saw its parent company, Alphabet, report an uptick in sales and a 14 percent jump in share value, both of which outpaced analyst estimates.

Tasked with building out the foundations of the company's products and helping keep users safe, the core unit umbrella oversees teams related to information technology, code development, infrastructure, and security.

News of the layoffs comes after prior reports indicated that Google was cutting jobs to cut costs and restructure the business amid its AI efforts, with many of the eliminated American roles being replaced with identical jobs abroad.

At least a quarter of the cuts took place at the company's Sunnyvale, California campus, impacting the engineering team there. According to internal documents viewed by CNBC, Google plans to hire for corresponding roles in Mexico and India.

"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," Aasim Hussain, vice president of the Google Developer Ecosystem, said in an email to staff announcing the layoffs.

Writing On The Wall

While these cuts are substantial and potentially harmful, they didn't exactly come without warning.

Just a year after laying off 12,000 people in January 2023, CEO Sundar Pichai teased in a company-wide memo that there would be more cuts to come in 2024 amid the company's big AI push.

"We have ambitious goals and will be investing in our big priorities this year," Pichai told Google staff in the memo, which was shared with The Verge. "The reality is that to create the capacity for this investment, we have to make tough choices."

That same Silicon Valley-speak was used in mid-April by Alphabet chief financial officer Ruth Porat, who told employees that the finance department is undertaking a restructuring effort that will involve both layoffs and relocations.

"The tech sector is in the midst of a tremendous platform shift with Al," Porat wrote in a memo, obtained by CNBC, to finance employees. "As a company, this means we have the opportunity to make more helpful products for billions of users and provide faster solutions to our customers, but it also means we collectively have to make tough decisions, including how and where we work to align with our highest priority areas."

Now it seems like we know who, generally speaking, is at the brunt of those "tough" calls — and it certainly isn't anyone in the Alphabet C-suite.

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