Google is making cuts to Area 120, its in-house incubator for new projects, according to people familiar with the matter, as the tech giant moves to control spending and focus more tightly on artificial intelligence.<\/p>\n
Some teams at Area 120 were notified this week that their projects had been reorganized or canceled, according to two people who asked not to be identified because the changes aren\u2019t public.<\/p>\n
The affected workers will need to find new roles at Google within a certain period of time or lose their jobs. One of the people estimated that half of the teams at Area 120 had been affected.<\/p>\n
A company spokesperson said in a statement that Area 120 \u201cwill be shifting its focus to projects that build on Google\u2019s deep investment in AI and have the potential to solve important user problems.\u201d<\/p>\n
\u201cAs a result, Area 120 is winding down several projects to make way for new work,\u201d said the spokesperson for Google, which is owned by Alphabet Inc. \u201cImpacted team members will receive dedicated support as they explore new projects and opportunities at Google.\u201d<\/p>\n
Area 120 will continue to incubate new projects, according to one of the people with knowledge of the situation.<\/p>\n
In recent years, Google has handled cutbacks by giving affected employees a window to find new roles. But the workers may face an uphill battle, especially as the company slows overall hiring.<\/p>\n
Launched in 2016, Area 120 offers select employees the opportunity to work on small startups that live inside Google.<\/p>\n
\u201cMany of Google\u2019s best ideas begin as passion projects,\u201d the Area 120 website explains. Among the incubator\u2019s biggest hits was GameSnacks, a gaming platform launched in 2020 that caters to people using low-memory devices on slow cellular networks.<\/p>\n
Yet Google has been signaling to both workers and Wall Street that it will exercise greater financial discipline in the face of a potential economic recession.<\/p>\n
In an email to staff in July, Alphabet chief executive officer Sundar Pichai said Google plans to \u201cfocus our hiring on engineering, technical and other critical roles\u201d for the remainder of this year and next year.<\/p>\n
Other parts of Alphabet are increasing their ambitions, though. Verily, Alphabet\u2019s life-sciences unit, announced this week that it had raised $1 billion in new investments led by its parent company.<\/p>\n
The sequence of events suggests Alphabet is prioritizing concrete gains in the short term over \u201cpie in the sky\u201d innovation, said Dan Ives, an analyst at Wedbush Securities.<\/p>\n
\u201cGoogle, like every other tech company, is going to have to make some tough decisions,\u201d he said. \u201cWith no more free money, investors don\u2019t want these companies to be spending like 1980s rock stars.\u201d<\/p>\n