Google: Don’t be Misled by the News of VA-Google Assistant Division’s Layoffs!

Google Alphabet (GOOGL) reported it intends to lay off hundreds of employees who developed the voice-activated Google Assistant software and eliminate a similar number of positions in its knowledge and information products teams.

Google told reporters that the reorganization will help improve Google Assistant as the company explores integrating newer artificial intelligence technology into its products. The company announced in October that it was using its generative AI chatbot Bard to build a new version of Google Assistant that “goes beyond speech to understand and adapt to you and complete personal tasks in new ways.” It is a good or bad news for investors?

The payroll optimization effort announced by Google must be viewed in the context of its continuous strive to keep its entire broad empire highly profitable. First of all, Google dominates the search market with 86% global market share and 80% U.S. market share.

Then, YouTube is the second-largest social media platform with 2.7 billion monthly active users (MAUs) and 122 million daily active users (DAUs). Two-thirds of the world's population uses YouTube, and YouTube TV has gained 7 million customers in its short lifespan.

As the third-largest cloud provider, Google serves one-tenth of the multi-trillion dollar market. Their incredibly powerful ecosystem connects everything: Gmail, Drive, Sheets, PowerPoint, Maps, the cloud, the App Store, and hardware like Chromebooks, Android, Pixels, and Fitbits. Their high cash flow business currently generates a considerable free cash flow (FCF) yield of 4.4%, which allows them to invest heavily in R&D and — as the forefront of the contemporary innovations — artificial intelligence, well beyond the capabilities of many competitors.