Google lays off 10% managerial staff to enhance efficiency amid advancement in AI

According to multiple reports, CEO Sundar Pichai indicated during an all-hands meeting on Wednesday that the cuts would affect managers, directors, and vice presidents.

A Google spokesperson told Business Insider that some affected employees would be "transitioned to individual contributor roles," while others faced outright "role eliminations."

The layoffs come in the wake of significant advancements in artificial intelligence (AI) and competitive pressure from rivals like OpenAI, whose innovations have been described by industry experts as potential threats to Google Search.

This draws importance because Google Search generated over 57 percent of the company’s revenue last year.

Following this paradigm shift, Google has integrated generative AI features into its products and recently launched Gemini 2.0, its most advanced AI model.

Pichai described it as heralding "a new agentic era" with AI models designed to understand and make decisions.

The launch boosted Google’s shares by over four percent, following a 3.5 percent rise the previous day after unveiling a breakthrough quantum chip.

With this Google has completed its fourth round of layoffs this year, including the elimination of "a few hundred" positions in its global advertisements team in January and around 100 roles in its cloud unit in June.

The company initiated its efficiency drive in September 2022, cutting over 12,000 roles—or 6.4 percent of its workforce—by January 2023.

In an open letter to employees at the time, Pichai accepted "full responsibility for the decisions that led us here" but emphasised the need to adapt after a period of dramatic growth.

He explained the layoffs followed a "rigorous" efficiency review that examined product areas, functions, levels, and regions across Alphabet. While acknowledging that the process could have been handled better, he remarked, "This is difficult for any company to go through.

At Google, we really haven't had a moment quite like that in 25 years... (but) it became clear that if we didn't act, it would have become worse."

In the same meeting, Pichai also highlighted the need to redefine Google’s corporate culture and its concept of "Googleyness," a term often associated with the qualities the company values in potential hires.