Google lays off “dozens” from X Labs, wants projects to seek outside funding

Enlarge / Exterior view of a Googleplex building, the corporate headquarters of Google and parent company Alphabet, May 2018. (credit: Getty Images | zphotos)

Google/Alphabet CEO Sundar Pichai wasn't kidding when, earlier this month, he said more layoffs are coming. The latest group to be hit is Alphabet's X Lab, which is losing "dozens of employees," according to a new report from Bloomberg. This is something like the 11th Google layoff announcement we've covered in the past 12 months and the fourth one this month.

The X Lab is Alphabet's "moonshot" experimental group, which is responsible for wild concepts like a wearable head-up display, a self-driving car, smart contact lenses, flying Internet balloons, and delivery drones. This is the age of Google cost-cutting, and you'll notice none of those projects is a rip-roaring commercial success. On Google's financials, the X Lab is part of Alphabet's "Other Bets" group, which burns through around a billion dollars every quarter. It's a research arm, so the hope is that spending all this money will someday lead to new revenue streams. For the short-term Wall Street types, though, it's a money loser, quarter to quarter, and that makes it a prime candidate for cuts.

Bloomberg has a copy of the memo announcing the cuts to the X Labs staff, and there's more in there than just layoffs. X Lab CEO Astro Teller writes: "We’re expanding our approach to focus on spinning out more projects as independent companies funded through market-based capital. We’ll do this by opening our scope to collaborate with a broader base of industry and financial partners, and by continuing to emphasize lean teams and capital efficiency." Basically, Google wants these money losers to find their own funding somewhere else, at least partially.