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Alphabet’s (GOOGL) Google is trimming jobs in its cloud division as it doubles down on artificial intelligence, according to Bloomberg. While the company hasn’t shared how many roles were cut, reports suggest fewer than 100 employees in the cloud team were affected. This move reflects Google’s effort to streamline operations and cement its position in the rapidly growing AI market. GOOGL stock has gained over 25% in the last 12 months.
Why Google Is Making These Cuts
Google’s cloud job cuts come amid slower growth in its cloud business. In its recent fourth-quarter 2024 earnings report, the Silicon Valley giant posted $11.96 billion in cloud revenue, falling short of analysts’ expectations of $12.19 billion. This slowdown has led the company to rethink spending and make changes across various teams to stay on track.
At the same time, Google is making a major push into AI, which is now a core part of its strategy. During its Q4 earnings call, the company announced plans to invest $75 billion in capital expenses this year to accelerate its AI projects.
CFO Anat Ashkenazi also emphasized the need to control costs while increasing AI investments to maintain an edge in the competitive tech landscape. By restructuring, Google aims to keep pace with rivals like Amazon’s (AMZN) cloud unit, Amazon Web Services (AWS), and Microsoft’s (MSFT) Azure, both of which are expanding their AI capabilities.
Employees Push Back on Layoffs
These cuts follow earlier, smaller layoffs as Google gradually reduced jobs across teams during its 2024 reorganization.
However, not everyone is happy with these changes. More than 1,250 Google employees have reportedly signed a petition demanding better job security. Led by the Alphabet Workers Union, the petition urges Alphabet CEO Sundar Pichai to provide buyout packages before further layoffs and ensure fair severance for those affected.
This shows that workers are demanding fair treatment as the company undergoes major changes.
Is GOOGL Stock a Buy?
The stock of Alphabet has a consensus Strong Buy rating among 37 Wall Street analysts. That rating is based on 26 Buy and eleven Hold recommendations assigned in the last three months. The average GOOGL price target of $215.56 implies 24.80% upside from current levels.
See more GOOGL stock analyst ratings
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