Verily Life Sciences, a healthcare unit of Alphabet Inc., GOOG 3.38%, is laying off more than 200 employees as part of a broader restructuring, the first major downsizing to hit Google’s parent company after a wave of layoffs at other tech companies.
The cuts will affect about 15% of jobs at Verily, which will stop work on a medical software program called Verily Value Suite and several early-stage products, CEO Stephen Gillett said in an email to employees on Wednesday. Verily has more than 1,600 employees.
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Verily oversees a portfolio of healthcare projects primarily focused on applying data and technology to patient care, including a virtual diabetes clinic and an online program connecting research participants to clinical trials.
“We are making changes that will refine our strategy, prioritize our product portfolio and simplify our operating model,” Mr. Gillett wrote in the email. “We will push fewer initiatives with greater resources.”
Originally known as Google Life Sciences, Verily is one of the largest companies alongside Google under the Alphabet umbrella, which is part of a group of companies known as “Other Bets”. According to the company, Alphabet had 186,779 employees at the end of September last year.
Verily has recently attempted to downsize a once expansive collection of projects ranging from insurance to mosquito breeding. Last year, the company hired McKinsey & Co. and Innosight for consulting work, the Wall Street Journal reported.
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The restructuring is a sign of the ongoing difficulties faced by big tech companies trying to crack the healthcare industry. David Feinberg, the head of an ambitious health-focused group at Google, left the company in 2021 to become CEO of health technology company Cerner Corp.
In the email to employees, Gillett said Verily would focus largely on products related to research and care while concentrating more decisions within a central leadership team rather than individual groups.
Mr. Gillett took over as CEO of Verily this month, succeeding noted geneticist Andy Conrad, who has moved to Executive Chairman.
“As we move toward the next chapter of Verily, we redouble our goal with the goal of ultimately achieving it be involved in all areas of precision health,” Mr. Gillett wrote to staff on Wednesday. “We will do this by building the backbone of data and evidence that bridges the gap between research and care.”
Google’s competitors have recently cut jobs in response to the deteriorating economy and a drop in online advertising. Last week Amazon.com Inc. announced layoffs that will affect more than 18,000 employees, the most of any tech company over the past year.
Tech Layoffs Across the Industry: Amazon, Salesforce, and More Cut Staff
At a company-wide meeting in December, Google CEO Sundar Pichai said he could not make any forward-looking commitments in response to questions about layoffs. Google has been trying to “streamline where we can so we can weather the storm better, regardless of what lies ahead,” he added.
Activist investor TCI Fund Management in November urged Alphabet to cut losses on other bets like Verily, writing in a letter to Pichai-san that the company had too many employees.
Alphabet’s Other Bets posted a $1.6 billion operating loss from $209 million in revenue in the third quarter of last year, mostly from sales of health technology and internet services.
Verily said it received $1 billion in funding from Alphabet and other investors in September, without naming the backers. Previous investments in the company included private equity firm Silver Lake, Singapore fund Temasek Holdings and Ontario Teachers’ Pension Plan.
Write to Miles Kruppa at [email protected]
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