Verily Life Sciences, the life sciences unit of Google’s parent company Alphabet, is restructuring with plans to cut more than 200 jobs. It’s the first major layoff at Google’s parent company since other tech giants have cut jobs.
Verily CEO Stephen Gillett said in an email to employees that the job cuts will affect about 15 percent of the company’s jobs and will “reduce or eliminate” some businesses and increase investment in others. Specifically, the company will stop developing a medical software project called Verily Value Suite and several early products.
In an email, Gillette asked employees to telecommute from home for the rest of the week, as Verily’s physical offices will close on Thursday and Friday. Verily has about 1,600 employees in total, the company said, adding that it will offer severance and reemployment services “in the coming weeks and months” but has not yet provided details.
“We can’t do everything and have had to make some tough choices,” Gillett wrote in an email. The company will hold a town hall meeting on Jan. 18 to explain the changes in more detail, the email said.
Verily is working on a number of healthcare projects that are focused on applying data and technology to patient care, including a virtual diabetes clinic and an online program that connects research participants to clinical studies.
We are making adjustments to refine our strategy, optimize our product portfolio and streamline our operating model,” Gillette wrote in an email. We will advance select programs with additional resources.”
Originally known as Google Life Sciences, Verily is one of Alphabet’s largest subsidiaries outside of Google and is a key part of what has been described as the “other bet.” As of the end of September last year, the company had 186,779 employees, according to Alphabet filings.
In fact, Verily has recently looked to cut back on a range of massive programs, from insurance to mosquito breeding. Last year, the company hired McKinsey & Company and Innosight to provide consulting services on the matter.
The restructuring shows that large tech companies trying to break into the healthcare industry still face tough challenges.
This month, Gillette took over from renowned geneticist Andy Conrad as Verily’s new chief executive, with Conrad succeeding as executive chairman.
In an email to employees, Gillette said Verily will focus primarily on products related to research and care, while more decisions will be made by a more senior leadership team, rather than individual teams working in silos.
Google’s peers have all been cutting jobs recently in response to worsening economic conditions and declining online ad spending. Last week, Amazon announced that it was laying off 18,000 employees, the largest number of tech companies in the past year.
In response to a question about the layoffs at an all-employee meeting last December, Sundar Pichai, chief executive of Google and its parent company Alphabet, said he couldn’t make any forward-looking commitments. He added, “Google is optimizing its business as much as possible so we can better weather the storm, whatever the future holds.”
Rights investor TCI Fund Management called on Alphabet last November to cut losses on other bets such as Verily, writing in a letter to Pichai that the company had too many employees. other bets at Alphabet recorded an operating loss of $1.6 billion, compared with revenue of $209 million in the third quarter last year, mainly from sales of medical technology and Internet services Verily said in September of last year that it had a loss of $1.6 billion.
Verily said last September that it had received $1 billion in funding from Alphabet and other investors, but did not disclose the identity of its backers. Private equity firm Silver Lake, Singapore fund Temasek Holdings and the Ontario Teachers’ Pension Plan have all previously invested in the company.
