Alphabet to cut the staff at the health sciences unit by 15%

In an email to employees Wednesday, Verily CEO Stephen Gillett said the company will lay off 15% of employees in a restructuring move as it strives for financial independence from its parent company Alphabet. The cuts will affect around 240 people, a Verily spokesperson confirmed.

Verily, which specializes in health sciences, is one of Google’s sister companies, operating within Alphabet’s “Other Games” category.

It is the first known layoff to hit the Google parent company after a wave of layoffs in the industry and fears of a recession. Although Google has so far avoided the sweeping job cuts that have hit other tech companies like Meta, employees have grown anxious about whether they could be next, CNBC has reported.

Gillett’s email instructed staff to work from home for the rest of the week, as Verily’s physical offices will be closed Thursday and Friday. “Those who are in the office at the office today can go home now,” it said, specifying that the instruction also applies to employees working from Google offices.

Some of Verily’s projects have included a contact lens that can detect diabetes symptoms, which was halted in 2018, and Project Baseline, an effort to collect health data with research organizations. It also provided a Covid-19 testing platform, which former President Trump highlighted at the start of the pandemic.

Some of Alphabet’s other plays include their own share structure, CFO Ruth Porat explained in 2019, and Verily has raised money from outside investors for several years. In 2017, Verily raised $800 million in external capital from Singapore’s Temasek, and has since raised more than $2 billion in multiple equity rounds.

Gillett said the cuts reflect discontinued programs and team “redundancy,” according to the emails, which were seen by CNBC. It says it will offer severance and relocation services “in the coming weeks and months” but has not yet provided details.

Gillett’s memo stated that it will “reduce or reduce” some parts of the business while increasing investment in others. Specifically, Verily will discontinue some early-stage products, including “remote patient monitoring for heart failure and microneedles for drug delivery,” the email said. “We cannot do everything and have had to make some difficult choices,” Gillett wrote. The email said the company would hold a meeting on January 18 to explain the changes in more detail.

Gillett’s memo also outlines several management changes and the departure of Jordi Parramon, the president of Verily’s unit businesses who had been with the company “since its early days.”

The memo said the company will notify laid-off employees with an email sent to their Verily and personal emails titled “Important update regarding your role.” Those who still have jobs will receive an email titled “Your Role at Verily.” Those working outside the US will hear from their company managers on Wednesday or Thursday, the memo says.

“While communicating via email is not ideal, this was a conscious decision that allowed us to communicate as efficiently and simultaneously as possible. We are also taking today and the rest of the week to ensure that every affected Veep has a personal discussion with a manager and HR partner to discuss the details, answer questions and provide support through the transition,” the memo said.

“As we enter Verily’s next chapter, we are doubling down on our purpose, with the goal of ultimately operating in all areas of precision health,” the note said. “We will do this by building the data and evidence backbone that closes the gap between research and care. We will also focus on building a financially independent company and a thriving corporate culture.”

Alphabet and Verily declined to comment further.