Google is cutting staff at its cloud division as it shifts its focus more heavily towards artificial intelligence. The company has not disclosed officially the exact number of job losses, but initial reports indicate fewer than 100 positions within the cloud team are affected.

This move follows Google’s strategy of streamlining its operations and reinforcing its position in the rapidly expanding AI sector.

Google Cloud, a division crucial to the company’s long-term growth strategy, has faced slower-than-expected growth. In its recent Q4 2024 earnings, the company reported cloud revenues of US$11.96 billion, falling short of the analysts’ forecast of $12.19 billion.

This underperformance has spurred the company to reconsider its spending and restructure certain teams in an attempt to meet its future objectives.

At the same time, Google is ramping up its AI investments. The company has earmarked $75 billion for capital expenses in 2025, focusing largely on accelerating its AI initiatives.

CFO Anat Ashkenazi has stressed the need to balance cost-control measures with aggressive AI investment to maintain Google’s competitive edge in the technology sector. The restructuring aims to streamline operations while keeping pace with rivals such as Amazon Web Services and Microsoft Azure, which are also intensifying their AI capabilities.

Internal resistance: Employee concerns over layoffs

However, not all is smooth sailing internally. Google’s decision to reduce headcount has sparked significant employee backlash. Back in January, more than 1,250 workers signed a petition demanding better job security.

The Alphabet Workers Union is leading the charge, urging CEO Sundar Pichai to offer buyout packages to employees before any further layoffs and ensure fair severance for those affected.

These protests come on the back of previous job cuts, which were part of company reorganisation efforts aimed at adjusting to the current economic environment. While the company has justified the layoffs as a way to free up resources for reinvestment in AI, employees are calling for more transparent communication and better treatment as Google navigates these changes.

The petition calls for a severance package similar to the one provided in January 2023, which included 16 weeks of pay and two weeks’ pay for every year of service.

Also Read: Are layoffs really necessary when adopting AI?

Job cuts across the tech sector

Google is not alone in making these tough decisions. As part of a wider trend, major tech companies, including Amazon, Meta, Microsoft, and Salesforce have all made cuts in their corporate workforce.

The common thread is the push to prioritise AI investments while managing costs. This is particularly pressing for tech giants looking to stay ahead of the curve in an increasingly competitive and volatile market.

Google Cloud, despite the recent job cuts, remains one of the company’s best bets for future growth. During its February earnings call, Ashkenazi reaffirmed the company’s commitment to expanding headcount in key areas such as AI and cloud computing. This suggests Google’s investment in its cloud business will continue to play a central role in its strategy for the future.

Worker sentiment: Growing instability and insecurity

As Google moves ahead with workforce changes, employees are said to be feeling increasingly insecure about their futures. An internal memo circulating among staff in the US and Canada voiced concern over the company’s ongoing instability.

Workers highlighted that despite Google’s strong financial position, the repeated rounds of layoffs – coupled with a lack of clear communication – have created an environment of anxiety.

The petition put forward by employees highlighted their concerns. The workers argued that the company’s current trajectory hampered its ability to deliver quality, impactful work. They pointed to Google’s financial strength and the abrupt loss of valued colleagues as further reasons why layoffs feel unnecessary and damaging.

Google’s core strategy remains focused on AI, a field in which it has already made significant investments. The company’s simultaneous commitment to controlling costs suggests managing its workforce effectively.

The cuts at Google’s cloud division are emblematic of the challenges facing tech companies as they navigate the push towards AI, the need for financial prudence, and the pressure to keep employees engaged and motivated.

While the company looks to position itself as a leader in AI, it must also manage employee expectations and ensure that its workforce feels secure and valued.

Ultimately, how Google handles its workforce in the face of such strategic shifts will likely shape its future, both as a technology giant and as an employer.