Google Expands Buyouts In Search And Ads Division As AI Reshapes Priorities

Alphabet, Inc.‘s GOOG GOOGL Google on Tuesday offered buyouts to U.S.-based employees in multiple departments, including the search ads unit.The Details: The company extended the voluntary exit program to workers in several divisions, according to CNBC. Impacted teams include knowledge and information (K&I), central engineering, marketing, research and communications.K&I, which oversees Google's search, ads and commerce operations, has roughly 20,000 staff.In its most recent quarterly report, Alphabet disclosed that Google Search and related services generated $50.7 billion of the company's total revenue of $90.23 billion. When including all advertising streams—such as Search, YouTube ads and Google Network—the total advertising revenue reached $66.89 billion for the quarter, underscoring how central these business lines remain to Google's overall financial performance.The latest buyouts follow previous headcount reductions dating back to 2023.CNBC reported that finance chief Anat Ashkenazi previously cited cost-cutting as a key priority amid rising AI infrastructure spending. Google has also implemented return-to-office requirements for some remote employees living within 50 miles of a company location.A memo from K&I chief Nick Fox encouraged employees who are disengaged or underperforming to consider the exit package. However, he urged those excited by their roles and aligned with the company's goals to stay.Earlier this year, similar buyouts were offered in the "Platforms and Devices" and "People Operations" units. Google is also shifting internal training resources toward practical AI tools and away from less essential programs, CNBC added.Why It Matters: Ongoing cost-cutting efforts at Google underscore the company's broader strategy to reallocate resources toward artificial intelligence infrastructure.In February, Google planned voluntary buyouts in its People Operations division beginning in March. Some mid to senior-level staff were offered 14 weeks of severance plus an additional week for each year of service.The company also laid off operations support employees in its cloud unit, with some roles relocated to India and Mexico City. Despite this shift, the memo stated the U.S. would remain the cloud team's largest hub.These cuts came after Ashkenazi said cost discipline would be key as AI-related demand outpaced infrastructure capacity. She noted the company ended 2024 with "more demand than we had available capacity" for its AI products.Google’s cloud division grew revenue by 30% year over year in Q4. Google continues to position cloud and AI initiatives as central to its 2025 investment priorities.Also Read: S&P 500 Flat As Fed Decision Looms, Oil Slips On Demand Concerns Image: Shutterstock