Yahoo Finance How Google is harnessing AI to manage talent and cut costs—and what it means for consumers
Good morning. One way AI is affecting how businesses operate is when it comes to the finance function, and Google is no different.
A memo sent to Google finance staffers by Alphabet and Google CFO Ruth Porat and seen by CNBC said the restructuring will affect teams worldwide. “The tech sector is in the midst of a tremendous platform shift with Al,” Porat wrote. Google also plans to create “hubs” for centralized operations in Atlanta, Chicago, Mexico City, Bangalore, and Dublin. She ended the letter: "We are sad to say goodbye to some talented teammates and friends we care about, and we know this change is difficult.”
A Google spokesperson told me via email that the firm is “responsibly investing in our company's biggest priorities and the significant opportunities ahead.” Google didn't confirm the amount of finance-related job cuts, with the spokesperson instead saying: “Throughout the second half of 2023 and into 2024, a number of our teams made changes to become more efficient and work better, remove layers and align their resources to their biggest product priorities.”
But investing further into emerging technologies like AI in 2024 does mean the company will “have to make tough choices,” according to an internal memo from Alphabet CEO Sundar Pichai in January. That could mean some teams lose headcount. But Google isn’t the only big tech company readjusting personnel in the age of AI, which Wedbush tech analyst Dan Ives said is for the better.
“This is a leaner and meaner Google that is now on the offensive around AI,” Ives told me. “There has been a lot of criticism of Google, and Sundar is taking a page out of the Meta playbook focused on efficiency and a new era of AI looking ahead. This is the right move at the right time for Google.”
In a blog post on Thursday, Pichai shared several structural changes to “improve velocity and execution across the company,” and one change is consolidating the teams that focus on building models across Research and Google DeepMind.
As Google cuts costs, “they're going to use this money to reinvest in bringing great products to customers even faster,” said Niccolo de Masi, chair of the Futurum Group, a technology research and advisory firm. “AI is a net job creator,” he told me.
According to de Masi, also the former chairman and CEO of Glu Mobile, and the former CEO of dMY Technologies, AI's impact will be compared to ATMs and Excel spreadsheets, which “have grown the number of people that work in finance exponentially in the past 50 years.”
AI will take care of mundane tasks, although higher-level expertise will still be required—at least in some capacity.
“Large companies may let go of bookkeepers, and consolidate higher-level expertise and supervision with machine learning,” de Masi continued.
Big tech companies like Meta and Google, and others that have close to 100,000 employees, will be “net growers,” de Masi said. “And the stock market is obviously very bullish on their ability to grow, which means they will keep hiring and acquiring.”
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
María Soledad Davila Calero curated the Leaderboard and Overheard sections of today’s newsletter.
This story was originally featured on Fortune.com
