What you need to know
- Alphabet reports its financial earnings for the first quarter of 2023
- The company earned 68.9 billion in revenue, an increase of 3% compared to the same period last year.
- Major layoffs at the beginning of the year lead to roughly 12,000 job cuts.
- Google has recently announced an increased focus on AI as it merges its two major AI teams.
Google's parent company, Alphabet, just announced its Q1 2023 financial earnings on Tuesday. The company reported $69.8 billion in revenue, a 3% increase year over year and just above analysts' expectations.
Search revenue improved slightly, accounting for more than $40 billion of Alphabet's revenue. However, revenue from YouTube ads decreased, likely as a result of reduced spending by advertisers, which the company noted in its previous quarter results. However, Shorts continues to gain popularity, as stated during the earnings call, where it was noted Shorts uploads grew 80% across Youtube channels last year. This comes amid Susan Wojcicki stepping down from her role as CEO.
Meanwhile, "Google other" revenue, which usually accounts for hardware sales, saw some growth, which could account for increased interest in the company's latest Pixel 7 smartphones.
Alphabet has gone through some major reshuffling as it refocuses the company on efficiency and AI. In January, Alphabet announced that it was laying off 12,000 employees, an unfortunate result of increased pandemic hiring over the past few years. As a result, Alphabet notes that the financial results reflect "$2.6 billion in charges related to reductions in our workforce and office space."
Google isn't the only company dealing with layoffs, as others such as Amazon, Meta, and Microsoft announced their own cuts to counter economic challenges.
Additionally, Google is moving full steam ahead into its AI efforts as it seeks to cover lost ground against ChatGPT with Bard, its in-house AI chatbot. While the company has always invested in developing its AI, it did so using two separate teams that will now work as one under the new Google DeepMind group. Alphabet notes that this newly combined team does not affect its first-quarter reporting.
One bright spot in the earnings is the Google Cloud division, which finally reported quarterly profits ($191 million) after consecutive losses.
Google is expected to have an exciting quarter as it prepares for the upcoming I/O developer conference, where it will undoubtedly make several big announcements. Among them are the long-rumored Pixel Fold, which is expected to compete against foldable phones from Samsung and other companies, and the Pixel Tablet, which will also serve as a smart home device.
