Alphabet (GOOGL.US) under Alphabet Inc. Class C reduces staff in the cloud computing department to free up funds for AI and other businesses.

According to sources familiar with the matter, Alphabet Inc. Class C, a subsidiary of Alphabet (GOOGL.US), laid off employees in its cloud computing division on Wednesday. The sources said that the layoffs affected fewer than 100 salespeople and were aimed at reallocating resources to invest in business and artificial intelligence (AI). A spokesperson for Alphabet Inc. Class C said in a statement that the company will continue to make adjustments to "meet customer needs and future significant opportunities." The spokesperson said, "As our team across the company is doing, we are making changes, continuing to invest in areas critical to our business, and ensuring our long-term success." Prior to these layoffs, Alphabet Inc. Class C's cloud business growth had slowed, and the tech giant had invested heavily in the field of artificial intelligence. Earlier this month, Alphabet reported cloud revenue below market expectations, and its 2025 capital expenditure guidance was far above expectations. Alphabet Inc. Class C had also conducted several rounds of layoffs before. In late January, the company announced a "voluntary departure plan" for employees in its platforms and devices division. Throughout 2024, Alphabet Inc. Class C gradually restructured departments, resulting in layoffs across the entire company. In the new year, layoffs at American tech companies have almost become the norm. Companies like Amazon.com, Inc., Meta Platforms, Salesforce, Inc., and Microsoft Corporation have all announced plans to lay off underperforming employees or seek to hire international labor with lower costs. These companies are under pressure to invest in AI technology without sacrificing profits. As its search business matures, Alphabet Inc. Class C's cloud is seen as one of the main drivers of growth for Alphabet and remains a key area of investment. During the company's earnings call in February, Alphabet's CFO, Anat Ashkenazi, said the company expects growth in the number of employees in key investment areas such as AI and cloud computing by 2025.