The squeeze in Silicon Valley continues.
Alphabet (GOOG, GOOGL) on Monday announced job cuts at its division X, which invests in the Moonshot project, Bloomberg reported.
Bloomberg reports that the company will cut “dozens of jobs” in that division, primarily focused on support staff, leaving the tech giant with far more than its usual domain of search (where it makes money). It suggests that there is still a desire to find solutions to problems beyond that. and digital advertising.
But in an email to staff obtained by “We are expanding our approach to focus on
Teller added: “We intend to achieve this by expanding our scope of collaboration with a broader range of industry and financial partners, and by continuing to focus on lean teams and capital efficiency.”
This stands out to us in two ways.
First, Alphabet's leaders acknowledged that the terms under which the tech giant agreed to make these investments included few economic parameters. In its most recent quarter, Alphabet's Other Betting division suffered an operating loss of $1.2 billion.
Currently, it is the company's prerogative to make these investments. As it turns out, the losses were not hidden from shareholders, and perhaps the pioneering spirit of the company, which was founded more as a science project than a money-making endeavor, is being maintained by almost deliberately losing this funding. There will be some debate. . However, that calculation appears to have changed as Alphabet puts more emphasis on AI and its Valley-wide cost-cutting drive allows it to cover cuts in other areas.
The second notable part of this new feature is how Alphabet plans to work to control costs in this division.
The company essentially outsources discipline to outside investors who seek to reap benefits beyond cultural benefits from their investments. At the end of its most recent quarter, Alphabet employed 182,000 people.
Management teams can say all the right things and implement all the right best practices to increase efficiency and more. But in an organization the size of Fort Lauderdale, even the most powerful directives can be difficult to steer in a new direction.
And while X is a small company independent of the larger Alphabet parent company, a simple memo is not enough when trying to change culture within such a large organization. As usual in American businesses, it costs dollars and cents.
This is not surprising. After all, culture was part of the reason X existed in the first place.
