With the advent of ChatGPT, artificial intelligence has become a hot topic among big tech companies. Google, which has tried to be at the forefront of this segment, needs justification. Alphabet CEO Sundai Picar has used the somewhat lackluster presentation of fourth-quarter results to ensure that the company is about to reveal “a jump” in the group’s search and other services.
Alphabet ended 2022 with record sales of $282,836 million (about $259,000 million at current exchange rates), up 10% year-on-year, it was reported Thursday. However, operating margins deteriorated and operating income fell 5% to $74.842 billion due to higher costs. In addition, there was a loss in value of some investments and other non-operating losses. As a result, full-year net income fell 21% to $59,962 million.
Things got even worse in the fourth quarter. Profit fell 34% to $13,624 million after billing rose less than 1% to $76,048 million, weighed down by dollar strength. Additionally, Google and YouTube’s ad revenue fell in the fourth quarter compared to the same period in 2021. The decrease is 3.6% to 59,042 million. It’s only the second time in Google’s history that ad billing has fallen, and the first in the second quarter of 2020 was due to the outbreak of the Covid pandemic.
Partly to offset those lackluster results, and partly in response to ChatGPT, Alphabet and Google CEO Sundar Pichai said in the earnings release, “Our long-term investments in deep computing leave us extremely well positioned as we tipped with artificial intelligence.” are reaching point and I’m excited for the AI-powered leaps we’ll unveil in Search and beyond.”
ChatGPT, an ally of Microsoft, is perceived as a threat to Google. As it improves and becomes more widespread, users may prefer to ask questions to chats or other similar services instead of trying to find links through the search engine. Alphabet has announced that it will be making changes to the way it reports results due to the rise of artificial intelligence.
Both Pichai and CFO Ruth Porat have referenced the “cost structure” review. Alphabet has announced 12,000 layoffs this year, which is 6% of its workforce. Figures released this Thursday show the group added 33,734 jobs in 2022, adding 71,000 over the past three years. It closed the year 2022 with 190,234 employees.
The Mountain View (California, USA)-based giant expects employee severance payments and other related costs of $1.9 billion to $2.3 billion, most of which will be reflected in accounts for the first quarter of 2023. It’s also taking steps to optimize its office space worldwide, which will also entail approximately $500 million in termination and related costs in the first quarter of this year.
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