Google is ramping up employee buyouts so it can spend more on AI

Google wants to further cut headcount in order to free up cash for artificial intelligence. 

The tech giant has extended voluntary buyout offers to U.S. employees, The Information reported Tuesday. It’s part of a larger cost-cutting plan to help fund the tens of billions of dollars it’s spending on developing AI models and systems.

The offers were extended to staff across multiple divisions, including search and advertising, research, and engineering.

“Earlier this year, some of our teams introduced a voluntary exit program with severance for U.S.-based Googlers, and several more are now offering the program to support our important work ahead,” a Google spokesperson told Quartz. 

But the invitations may not come as a surprise, as Google has been trimming workers for years in order to build a war chest of cash for AI. It completed its largest-ever round of layoffs in 2023, cutting around 12,000 employees, or 6% of its workforce. It has cut jobs in smaller amounts since then. For instance, employees who work on Android, Chrome and Pixel products were offered voluntary buyouts in January, in addition to those in finance, legal and human resources.

Google is beefing up its AI spending as it competes with the likes of ChatGPT, Perplexity and Anthropic, which are refining their sophisticated large language models that threaten Google’s search engine dominance. 

Last month, it was revealed that Apple is exploring how to incorporate AI-powered search engines on its devices. AI tools are “so much better [than search engines] that people will switch,” said Eddy Cue, Apple’s senior vice president of services, during his testimony in the U.S. Justice Department’s lawsuit against Google parent company Alphabet. The news caused Alphabet’s share price to fall 8%.

In order to keep up with the post-search era — a term for users’ increasing preference for retrieving answers via chatbots instead of curated links — Google launched AI Overviews last year. The feature summarizes search results, replacing the need to sift through websites. It took this a step further last month, overhauling its search engine with the U.S. introduction of “AI Mode,” which answers search queries in a chatbot-style conversation with fewer links.