In a significant strategic shift, Verily, Alphabet’s life sciences subsidiary, has announced the termination of its medical device program, resulting in staff layoffs. This decision aligns with Alphabet’s broader initiative to reallocate resources toward artificial intelligence (AI) and data infrastructure.
CEO Stephen Gillett communicated this development in a staff memo, acknowledging Verily’s history of pioneering medical devices and emphasizing the necessity of making challenging decisions to align with the company’s new focus.
This move is part of Alphabet’s ongoing strategy to invest heavily in AI while reducing expenditures in other areas. The company has implemented multiple rounds of layoffs in recent years, including reductions in its human resources and cloud divisions earlier this year, as well as voluntary exit programs for over 25,000 employees in its Platforms & Devices sector.
The most substantial layoffs occurred in January 2023, with Alphabet cutting 12,000 jobs—approximately 6% of its workforce at that time—in anticipation of an economic downturn. This period also marked the rapid rise of ChatGPT, which became the fastest-growing consumer software application in history, amassing over 100 million users in two months and igniting the current generative AI boom that is reshaping the tech industry’s priorities.
Verily’s decision to discontinue its medical device program reflects a broader trend within Alphabet to prioritize AI development. This shift is evident in various divisions, including the robotics sector, where Alphabet’s Intrinsic division faced layoffs in January 2023. These actions underscore Alphabet’s commitment to focusing on AI and data-driven initiatives.
Verily, originally known as Google Life Sciences, was rebranded in 2015 as part of Alphabet’s restructuring. The company has been involved in various innovative projects, such as developing a contact lens capable of monitoring glucose levels for individuals with diabetes. Despite these advancements, the recent strategic pivot indicates a realignment of priorities within Alphabet’s subsidiaries.
In 2019, Verily expanded its startup investment program, Partner Space, to collaborate with emerging companies in the healthcare sector. This initiative aimed to foster innovation by providing resources and support to startups working on cutting-edge health technologies. However, the current shift toward AI suggests a reevaluation of these collaborative efforts.
Verily’s Study Watch, a wearable device designed for long-term medical research, received FDA clearance for its electrocardiogram (ECG) technology in 2019. The device was intended to gather vital signs for studies on conditions like multiple sclerosis and Parkinson’s disease. The discontinuation of the medical device program raises questions about the future of such initiatives.
Alphabet’s strategic realignment is not limited to Verily. The company’s robotics division, Intrinsic, experienced layoffs in early 2023, reflecting a broader trend of resource reallocation toward AI and data-centric projects. These decisions highlight Alphabet’s commitment to staying at the forefront of technological innovation by focusing on areas with the highest potential for growth and impact.
The tech industry’s rapid evolution, particularly in AI, has prompted companies like Alphabet to reassess their portfolios and invest in areas that promise significant advancements. The success of AI applications, such as ChatGPT, has demonstrated the transformative potential of these technologies, influencing strategic decisions across the sector.
As Alphabet continues to navigate this dynamic landscape, the emphasis on AI and data infrastructure is likely to shape the company’s future endeavors. While the discontinuation of Verily’s medical device program marks the end of a chapter, it also signifies the beginning of a new focus on leveraging AI to drive innovation and address complex challenges in healthcare and beyond.
