Google follows Microsoft on the path to cost-cutting:Employees in 5 countries offered money to leave jobs; heavy AI spending strains budget

Google has announced a buyout in five countries following Microsoft. To cut costs, the company has offered employees in Canada, France, Germany, Japan, and Switzerland an exit package to leave their jobs voluntarily in exchange for payment. Amid heavy spending on artificial intelligence and a growing workforce, Google’s parent company Alphabet has taken this decision to focus on its AI strategy and shift resources according to priorities. India employees not included in exit programme A Google spokesperson told Reuters that the company had launched a “voluntary exit programme” for some employees in Canada, France, Germany, Japan and Switzerland in June. Google has not included its employees in India in the exit package for now. Tech company Google has been running this exit programme in some divisions in the US and UK since last year. The company says the programme is an option for employees who no longer feel aligned with Google’s new thinking and direction. Company focuses on AI and cloud computing The company, led by Sundar Pichai, now wants to shift its resources to sectors that rank high on its priority list. The company is now fully focused on artificial intelligence (AI) and cloud computing, making these sectors the top priorities in Google’s recruitment plans as well. That is why, when buyout offers were made last time, employees of Google Cloud and the AI unit DeepMind were excluded. What is Google’s plan in Switzerland? Google has a major engineering hub in Zurich, Switzerland, where around 5,000 employees work. In June, the company offered employees exit packages there and gave them until July to apply. Employees who opted for the offer will receive one month’s salary for every year of service, up to a maximum of 12 months’ salary. Wall Street worried over heavy spending on AI Google and other major companies are spending heavily on AI technology. This high spending has worried Wall Street investors, leading to a decline in Alphabet’s shares. Recently, technology company Microsoft also offered buyout contracts to 60,000 employees as part of efforts to rein in its expenses. Company’s workforce crosses 2.04 lakh Alphabet’s headcount has risen steadily in recent times. By the end of September, the total number of employees at Google had risen to 2.04 lakh. The company added around 10,000 new employees in just six months. This increase was recorded at a time when most other technology companies were changing their business strategies and cutting their workforce. Wiz acquisition added 2,000 employees The acquisition was also a major reason for the surge in the number of employees. In March this year, Google acquired cybersecurity firm Wiz. Following the acquisition, Wiz’s 2,000 employees were brought into Google. What is a buyout offer? When a company offers employees the option of resigning voluntarily instead of directly dismissing them, it is called a buyout or voluntary exit programme. Under this arrangement, employees who resign are given a lump-sum severance package (money) and additional benefits in return for their service.