Alphabet Stock Up 2.3% at Market Open After Reports of Restructuring at Google
Shares of Google's parent company Alphabet advanced 2.3% at the market open after the reports of its ad sales unit restructuring.
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Shares of Alphabet (NASDAQ: GOOGL) climbed 2.3% at the market open on Wednesday after The Information reported that Google plans to reorganize its ad sales unit. The move comes amid increasing reliance on machine learning and artificial intelligence (AI), raising questions over potential layoffs at Google.
Is Google Planning Layoffs at its Ad Sales Department?
According to a report by The Information, Google owner Alphabet is planning a major restructuring of its ad sales unit.
In a meeting last week, the company’s ad sales boss for the Americas region, Sean Downey, announced that Google intends to overhaul its 30,000-person ad sales team. Downey did not specify whether restructuring would involve job cuts.
The move comes as the tech giant increases its reliance on machine-learning solutions to help customers buy more ads on its search engine, YouTube, and other platforms, said The Information. The company reportedly planned to consolidate its workforce using different steps, including layoffs, by reassigning staff to its large customer sales department, which oversees relationships with major advertisers.
Alphabet announced it would cut 12,000 jobs in early 2023, 6% of its global workforce. Several months later, the technology behemoth reduced its workforce at mapping app Waze after merging its advertising system with Google Ads technology.
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GOOGL Up 2.3% at the Opening Bell
Shares of Alphabet, the parent company of Google, rose 2.35% at the market open following the news.
Akin to its tech peers, the company has staged a significant rebound this year following a 2022 drought fueled by unparalleled investor interest in generative AI. Like Microsoft (NASDAQ: MSFT) and OpenAI, Google has also been ramping up efforts to develop the so-called large language models (LLMs), releasing a GPT-4 competitor earlier this month.
However, its stock price experienced several bumps, particularly after its latest earnings report. Although Alphabet beat estimates on top and bottom lines, it posted a worse-than-expected revenue at its cloud unit, a key investment area as the company tries to catch up to Amazon Web Services and Microsoft Azure.
US equities experienced another leg of the rally over the past week, buoyed by the Federal Reserve’s plans for a dovish pivot in 2024.
With growing reliance on machine learning and AI, do you think we will see tech giants carry out major layoffs in the coming years? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
