Google Fiber Told to Lay Off Half of Its Staff (Report)

google fiber logo
Courtesy of google fiber

Google’s internet access project may be getting too expensive for parent company Alphabet: Google Fiber is being told to reduce its workforce from 1000 to 500 employees, according to a report from The Information. This comes after reports that Fiber may be looking to cheaper wireless technology to accelerate its subscriber growth.

The Information is reporting that the cost-cutting directive is coming straight from the top: Alphabet CEO Larry Page told Google Fiber chief Craig Barratt last month to reduce the size of his team by 50 percent, according to the report.

Alphabet representatives didn’t immediately respond to a request for comment.

Google first launched its Fiber internet access business in 2010, offering Kansas City residents Gigabit-speed internet access for $70 a month. The company has also been offering a traditional TV bundle to Fiber customers, making the product a competitor to existing cable and telco services.

Google subsequently embarked on an aggressive expansion of Fiber, which is now available in eight metropolitan areas, with a roll-out planned for five additional markets, including Irvine, Calif. and San Francisco. Google said in the past that it was considering bringing Fiber to around a dozen additional markets, including Los Angeles, Chicago, Dallas and Portland.

But subscriber numbers are well below initial expectations, according to the report. At the same time, Fiber has been burning money, which has become more obvious ever since Google organized under the Alphabet umbrella last year. That reorganization resulted in Fiber being separated from Google’s legacy businesses into an “other bets” group that also includes Nest, maker of the internet-connected thermostat. This group has losing a lot of money, to the tune of $859 million during Google’s most recent fiscal quarter.

Recent reports indicated that Google may be slashing Fiber costs by using wireless technology to connect homes to the internet, which could be a lot cheaper than digging trenches to lay fiber-optic cables. In June, Alphabet acquired San Francisco-based wireless internet provider Webpass, which could be key to these cost-savings plans.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 2

Leave a Reply

2 Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

  1. Bill B. says:

    I live in Portland. I was hoping for this to arrive here. Comcast is terrible. Had to cancel their TV services when the price hit the $200 mark. When they asked why, I told them they were too expensive and his response was look at all the channels you get and my answer was look at all the channels I pay for that I don’t want. Had to keep their Internet services though as there is nothing in this area compatible to their speed. Was waiting for Google Fiber. Sigh.

  2. Bas says:

    It must really be a great week for Comcast; first they completed the DWA deal and now it seems Google’ broadband business is calling it quit.As a big fan of Google, I think they was no point of creating a parent holding company to diversify and it should stick to what it does best;Ads, Search, Android and YouTube.

More Digital News from Variety

Loading