Google, $GOOGL, spent $2.1 billion on severance and other expenses as it laid off more than 12,000 employees over the course of 2023
Google, $GOOGL, spent $2.1 billion on severance and other expenses as it laid off more than 12,000 employees over the course of 2023, per the Verge.
Despite the reductions, Google concluded 2023 with growth across most of its primary business segments. The tech giant reported $86 billion in revenue for the fourth quarter of 2023, marking a 13 percent increase compared to the previous year. CEO Sundar Pichai attributed the steady growth in Google's core digital advertising and cloud computing businesses to the company's investments in generative AI.
Google's flagship revenue source, its search engine business, generated $48 billion, reflecting nearly a 13 percent rise year over year. Pichai highlighted that the company's subscription services and devices segment brought in $10.7 billion, largely driven by subscriptions to YouTube Premium and Music, YouTube TV, and Google One. YouTube's advertising revenue reached $9.2 billion, marking a 15 percent increase from the previous year.
During an investor call, Pichai referred to 2024 as Alphabet's "Gemini era," alluding to the company's AI language model that it aims to integrate across all of Google's core products. Pichai stated, "Gemini is the first realization of the vision we had when we formed Google DeepMind, bringing together our two world-class research teams." He also mentioned the upcoming Gemini Ultra, an updated version of the original model that the company is currently developing, with plans to integrate it into their products, starting with Search.
While Google currently ranks as the third-largest cloud provider globally, trailing behind Microsoft's Azure and AWS, its cloud division gained momentum last year. Google Cloud reported $9.19 billion in revenue, marking a significant increase of 25.6 percent year over year.
Although layoffs incurred significant costs for Google, the cutbacks in real estate, particularly in expensive areas like the Bay Area, added to the expenses. The closure of physical office spaces amounted to a total cost of $1.8 billion for Google throughout 2023. Additionally, Google's ongoing investments in AI, known as its "Gemini era," suggest further layoffs in 2024 as the company makes adjustments in other divisions to offset expenses.