During the Code Conference last week, Google CEO Sundar Pichai indicated the need for the tech giant to become 20% more efficient, sparking speculation about potential workforce reductions. Now, it appears that speculation might be turning into reality, as Google has confirmed a significant downsizing of projects within its internal research and development division known as Area 120.
The company informed its staff on Tuesday about a “reduction in force,” which will result in a 50% reduction in the size of Area 120. Previously, the division housed 14 projects, but this number has now been cut down to seven. Those working on the discontinued projects were informed that they need to find a new job within Google by the end of January 2023, or they will face termination. The company hasn’t clarified whether everyone affected will be able to secure new roles.
Elias Roman, the lead of Area 120, explained that the division is refocusing its efforts exclusively on AI-first projects, a departure from its earlier mandate to support product incubation across all of Google. This shift aims to streamline the division’s focus on projects aligned with Google’s deep investment in artificial intelligence that can address significant user problems.
A Google spokesperson confirmed the changes, stating, “Area 120 is an in-house incubator for experimental new products. The group regularly starts and stops projects with an eye toward pursuing the most promising opportunities. We’ve recently shared that Area 120 will be shifting its focus to projects that build on Google’s deep investment in AI and have the potential to solve important user problems. As a result, Area 120 is winding down several projects to make way for new work. Impacted team members will receive dedicated support as they explore new projects and opportunities at Google.”
Over the years, Area 120 has launched successful products, including the HTML5 gaming platform GameSnacks, the AirTable rival Tables, AI-powered conversational ads platform AdLingo, video platforms Tangi and Shoploop, web-based travel app Touring Bird, and technical interview platform Byteboard.
Among the projects being canceled with these changes is Qaya, a service providing web storefronts for digital creators. Launched late last year, Qaya integrated with Google Search and Google Shopping, offering features similar to existing “link in bio” solutions such as Linktree or Beacons. Unfortunately, the other six projects that are now being canceled weren’t launched, and they include a financial accounting project for Google Sheets, another shopping-related product, analytics for AR/VR, and three climate-related projects focusing on EV car-charging maps, carbon accounting for IT, and carbon measurement of forests.
These changes follow a reorganization of the Area 120 team last year when it was moved into a new division called “Google Labs,” led by veteran Googler Clay Bavor. The incubator was grouped alongside other forward-looking efforts at Google, including its virtual and augmented reality developments and Project Starline, a holographic videoconferencing project. It’s worth noting that Google Labs and Project Starline are not impacted by the recent changes.
In July, Pichai announced Google’s intention to slow hiring and sharpen its focus, but the company emphasized that larger layoffs were not planned. However, the renewed emphasis on productivity may lead to restructuring teams, discontinuing products, or, in some cases, eliminating roles. Area 120 had over 170 employees at the beginning of the year but is now reportedly under 100, according to one source, though Google contested the accuracy of these figures. The company has a total workforce of over 174,000 employees.
