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Search giant Google is undertaking a major reorganization of its ad sales division, which has about 30,000 employees, as a result of the company’s recent advances in artificial intelligence (AI), according to a report published Tuesday by The Information.
The move comes after Google laid off about 12,000 employees earlier this year, in what would become the largest job cuts in the company’s history.
According to the report, many functions within its ad sales department are becoming redundant as Google has introduced new AI-powered tools that can automatically recommend and generate high-performing ads for advertisers, requiring minimal human input.
Notably, Google launched its AI-based ad campaign planner called Performance Max last year. However, at the I/O developers conference earlier this year, the company revealed plans to incorporate generative AI capabilities into the tool, making it easier for users to “create custom assets and scale them with a few clicks.”
The information states that a growing number of advertisers have now implemented Performance Max, eliminating the need for employees who specialize in selling ads for specific Google services such as YouTube, Search, Display, Discover, Gmail and Maps.
News of the restructuring was announced internally last week by Google’s President of the Americas and Global Partners, Sean Downey. However, Downey did not specify whether the overhaul would necessitate further job cuts, the report said.
This development highlights how advances in AI are disrupting even a tech giant like Google, allowing machines to take over certain tasks previously done by humans. It remains to be seen what the long-term impact will be on the company’s ad sales force.
Google CEO discusses the impact of layoffs
At an internal company meeting, Google CEO Sundar Pichai talked about the impact of the company’s decision earlier this year to lay off about 12,000 employees worldwide.
In response to an employee who asked about the effect of this move on Google’s growth, finances and morale, Pichai acknowledged that this was “one of the most difficult decisions for the company,” marking a pivotal moment unlike anything seen before done in the company’s 25-year history.
He characterized the layoffs as “difficult but necessary,” arguing that if Google had not reduced its workforce last year, it would have been an even worse decision later.
Pichai said avoiding the job cuts would have created a “major overhang” for Google, severely limiting its ability to invest in key areas during a year of massive global shifts.
The head of Alphabet said that while morale has been hit, the decision has allowed Google to build capacity to put resources into its AI efforts and other emerging technologies.
Pichai said saying no to layoffs last year would have saddled Google with serious financial burdens and hampered its agility during a period of volatility.
While the move was incredibly tough on the affected employees, Pichai stands by his call and believes it was critical to Google’s continued growth and innovation. However, rebuilding morale remains an ongoing challenge as the company heads into 2024.