Google spent $2.1 billion on severance packages and other expenses associated with laying off more than 12,000 employees in 2023. In just one month of 2024, the company has already spent $700 million on the same needs.
Physical office closures cost Google a total of $1.8 billion in 2023.
Alphabet, Google's parent company, released these numbers along with its fourth-quarter 2023 earnings report.
Despite the cuts, Google ended 2023 with growth in most of its core businesses. The company's fourth-quarter revenue was $86 billion, up 13% year over year. The search giant's core businesses in digital advertising and cloud computing also saw strong growth, which Google CEO Sundar Pichai attributed to Google's investments in generative artificial intelligence. Google's main source of revenue, its search engine business, brought in $48 billion, up nearly 13% from last year. According to Pichai, the subscription services and devices segment enabled the company to generate $10.7 billion in revenue, primarily driven by subscriptions to YouTube Premium and Music, YouTube TV and Google One. YouTube's advertising revenue was $9.2 billion, up 15% from last year.
In a call with investors, Pichai called 2024 the "Gemini era" for Alphabet, referring to the artificial intelligence language model expected to power all of Google's major products. “Gemini is the first realization of the vision we had when we formed Google DeepMind, bringing together our two world-class research groups,” he said. The Gemini Ultra model is expected to be released soon.
Google is currently the third largest cloud provider in the world, behind Microsoft Azure and AWS. But the cloud division has picked up steam in the past year. The company reported Google Cloud revenue of $9.19 billion, up 25.6% year over year.
It was previously reported that Google would face further cuts in 2024 to achieve “ambitious goals,” including in the field of artificial intelligence.
It also became known that Alphabet is laying off some employees in its laboratories and restructuring division X in an attempt to simplify the implementation of projects for which funds are provided by external investors.
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