Google’s parent Alphabet Inc has decided to cut about 12,000 jobs, or six per cent of its workforce, the company said on Friday, as the technology sector reels from layoffs and companies stake their futures on artificial intelligence (AI).
The price of Alphabet’s shares increased by almost 4% in morning trading. The computer firm, which has long been at the forefront of important fields of AI development, is in a precarious position as a result of the downsizing.
Microsoft Corp. is now competing with Alphabet in a field of technology that, for example, can produce almost any form of material a user might imagine and put in a text box. Following the release of ChatGPT, a chatbot that can respond to questions with human-like responses by Microsoft-backed startup OpenAI, analysts in the industry predicted that so-called generative AI may challenge Google’s supremacy in an internet search.
Microsoft announced this week that it was also being forced by recession concerns to cut 10,000 positions, or fewer than 5% of its workforce, but that it would instead concentrate on incorporating more AI into its products moving forward. Sundar Pichai, the CEO of Alphabet, echoed this idea in his memo regarding layoffs.
In contrast to the previous two years, when it rapidly increased staff, moves for which Pichai claimed “full responsibility,” Alphabet now faces “a different economic reality.” Pichai became Alphabet’s CEO in 2019.
The company has “a substantial opportunity in front of us with AI across our products,” he continued, adding Google is preparing “to provide some whole new experiences for consumers, developers, and enterprises.”
Two sources with knowledge of the situation indicated that the corporation has been working on a significant AI launch.