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Google's New Round of Layoffs, 50 People in the Cloud Computing Department Are the First to Bear the Brunt

5 years ago
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Dao Wei
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Recently, Google's cloud computing department announced layoffs, saying that in order to adjust its focus on the international market, a small-scale personnel adjustment will be made. Although the specific number of people has not yet been announced, informed sources revealed that about 50 people will be affected. Behind the first layoffs in 2020, what does it reflect about Google's situation in the cloud computing market?

Google's first layoffs in 2020 have arrived, and this time the Google Cloud Computing division is hit.

According to a report in the Wall Street Journal on February 14,Google Cloud is planning to cut some jobs and adjust its focus on international markets in an effort to gain greater competitiveness in the cloud computing market.

At the same time, Google also stated that this was a small number of layoffs and that it would provide other job opportunities to the affected personnel.

Layoffs: part of cloud business restructuring

Google said the small-scale layoffs were part of its cloud business restructuring plan.

In an email to the media, Google executives wrote:

“Recently, we announced a restructuring to a handful of our teams.This move will improve the way we market, collaborate and engage with customers across industries around the world."

And also gave instructions and subsequent treatment measures:

"We have made the difficult but necessary decision to inform a small number of employees that their positions will be eliminated.But we're also working with other teams across the company to help impacted employees find new roles."

It is reported that this round of layoffs is just a small-scale adjustment, and about 50 people will be affected.

Google Cloud issued a "military order" to avoid being the third

Behind this operation, people can't help but think of the determination that Google Cloud had made before.

In terms of market share in cloud computing, Google Cloud has always been far behind Amazon AWS and Microsoft Azure.

In the annual report released by Google not long ago, the cloud computing department generated annual revenue of 8.9 billion US dollars in 2019, a surge of 53% from 2018 and twice the total sales in 2017.

But compared with the other two, it is still far inferior.

Three industry leaders in the cloud computing market

Amazon's cloud computing division had revenue of more than $35 billion last year, almost four times that of Google Cloud.

In the fourth quarter of 2019 alone, Microsoft's total revenue from its cloud computing business reached US$11.9 billion.
For more details, please refer to our previous article"The financial report is here. AWS's revenue last year was 3 times that of Azure and 4 times that of Google Cloud"View in.

When Larry Page was in office, he revealed that he was very dissatisfied with the current situation in which the company ranked third in the cloud computing business and had a huge gap with the top two.

Gartner's July 2019 cloud computing market landscape

Google also specifically discussed the development and survival of its cloud computing department, and even considered withdrawing from the cloud computing market entirely, but this somewhat out-of-control idea was ultimately rejected.

Eventually, management came up with an ambitious plan for Google Cloud.By 2023, Google's cloud business must beat Azure or AWS and at least secure a top two spot in the market.

If Google's cloud computing business does not develop as expected, its investment will be cut.

Google Cloud’s Dilemma and Solution

This personnel change is only a small aspect. In fact,For a long time, Google Cloud has been constantly seeking change and trying to find opportunities for breakthrough development.

Because "cloud computing" is a concept first proposed by Google in 2006, but due to its own development strategy and other reasons, it was reluctant to disclose its performance for a period of time, and latecomers such as Alibaba Cloud are also catching up.

Google's parent company Alphabet's 2019 fourth quarter financial report also disclosed Google Cloud's performance for the first time

Some people analyzed that the decline of Google Cloud is related to the culture of being obsessed with technology within the company. The shortcomings of marketing and ecological deficiencies caused by Google's engineering culture have been continuously magnified during the expansion of cloud computing.

A Google employee once said,"Google is selling its own technology and what it thinks its customers need, not what customers think they need."

The only way to break all this is through constant change.

Last year, Google Cloud spent a lot of money to hire Thomas Kurian from Oracle to take over as CEO, and also increased the stakes of its cloud business, trying to improve the overall plan and invest more in sales for it.

Thomas Kurian was previously an executive at Oracle

Among them, Thomas Kurian focused on launching some strategies, such as increasing the number of employees in the department, recruiting some heavyweight executives, and adjusting the sales methods of cloud computing products.

Thomas Kurian also said,The cloud computing business focuses on five areas: retail, healthcare, financial services, media and entertainment, and manufacturing.

It seems that all measures are moving towards the goal of 2023, but no one knows whether Google Cloud can achieve its goal.

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