Alphabet’s life sciences subsidiary Verily has laid off staff and shut down its entire medical devices division, according to an internal memo circulated Monday.
CEO Stephen Gillett described the move as a “difficult decision,” saying the company must focus its resources on AI and data infrastructure. “Over the years, Verily has built a legacy in developing world-class, innovative medical devices,” he wrote. “The path forward requires difficult decisions.”
Alphabet’s Cost-Cutting Strategy
The change reflects Alphabet’s broader strategy of cutting costs in traditional business units while doubling down on artificial intelligence. Since early 2023, the company has implemented several rounds of layoffs, including in human resources and cloud computing, as well as voluntary exit programs across its Platforms & Devices division.
Alphabet’s largest recent workforce reduction came in January 2023, when 12,000 jobs — about 6% of staff — were cut amid concerns about an economic slowdown.
That same month, OpenAI’s ChatGPT hit 100 million users in record time, sparking the generative AI boom that has since reshaped the tech sector. Alphabet, like its rivals, has shifted major investments into AI projects, with Verily’s restructuring showing how far that prioritization now extends.
What The Author Thinks
Verily’s decision to abandon its devices program shows how AI hype is rewriting the priorities of even specialized companies. While data and AI infrastructure are crucial, the abrupt exit from hardware risks erasing years of expertise in medical devices that could still serve patients. Cutting everything that isn’t AI may look efficient on paper, but it also raises the question of whether innovation is being sacrificed for short-term alignment with industry trends.
Featured image credit: Technology Org
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