In a significant organizational shift, Google plans to reassign staff from its large-customer sales team, which primarily handles major advertising clients, to the Google customer-solutions team focused on smaller and medium-sized businesses.
Strategic Workforce Adjustment at Google
This strategic adjustment, made in response to decreased demand from larger clients, echoes past organizational changes. According to a Google spokesperson, although this move is more significant than similar restructurings during the pandemic, it remains within the realm of normal business adjustments.
Philipp Schindler, Google’s Chief Business Officer, outlined the company’s strategy in a memo, stating, “Going forward, GCS will be our core channel for scaling growth by dynamically delivering the right treatment to every customer — while LCS focuses on transformational growth for our largest, most sophisticated customers,” as reported by Business Insider.
“While I’m confident we’re doing the right thing for our customers, partners, and ultimately for our business, this will be very hard for many, especially across our LCS teams,” he later added.
Google’s Layoffs Amidst AI Integration
Google’s recent layoffs, primarily impacting the large customer sales team, are not linked to the introduction of its advanced AI model. These layoffs, reported in late 2023, also included reductions in the voice assistant and augmented reality hardware units.
A Google spokesperson conveyed to FOX Business, “We’re responsibly investing in our company’s biggest priorities and the significant opportunities ahead. To best position us for these opportunities, throughout the second half of 2023, a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities.”
Google’s workforce reduction is part of a broader trend among tech giants — Amazon, Microsoft, and Meta — that streamline operations in the competitive AI arena. Recently, Google unveiled its AI software, Gemini, aiming to challenge the Microsoft-backed OpenAI GPT-4 and Amazon’s forthcoming “Olympus” software, as per industry reports. These layoffs are a strategic response to the escalating AI competition.
AI’s Impact on Staffing in Tech Giants
Echoing this trend, Amazon, last week, made substantial cuts affecting hundreds in its streaming, studio, Twitch, and Audible divisions, various media outlets reported. Industry tracker Layoffs.fyi notes that tech firms collectively dismissed over 7,500 employees in January, underscoring the industry-wide shift.
These layoffs come a year after CEO Sundar Pichai’s announcement in early 2023, where he revealed plans to reduce Google’s workforce by 12,000 roles due to tough economic conditions. The cuts have affected teams globally, including recruiting, corporate functions, and specific engineering and product groups.
Google’s move to shift staff from large-customer sales to smaller businesses reflects changing market dynamics. Is this a viable strategy amid AI integration and industry-wide layoffs, or could it pose risks to client relationships and revenue streams?