Verily Life Sciences, a healthcare unit of
Alphabet Inc.,
GOOG 3.38%
is laying off more than 200 employees as part of a broader reorganization, the first major staff reductions to hit Google’s parent following a wave of layoffs at other technology companies.
The cuts will affect about 15% of roles at Verily, which will discontinue work on a medical software program called Verily Value Suite and several early-stage products, CEO Stephen Gillett said in an email to employees Wednesday. Verily has more than 1,600 employees.
Verily oversees a portfolio of healthcare projects largely focused on applying data and technology to patient treatments, including a virtual diabetes clinic and an online program for connecting research participants to clinical studies.
“We are making changes that refine our strategy, prioritize our product portfolio and simplify our operating model,” Mr. Gillett wrote in the email. “We will advance fewer initiatives with greater resources.”
Originally known as Google Life Sciences, Verily is one of the largest businesses other than Google under the Alphabet umbrella, part of a group of companies known as “Other Bets.” Alphabet had 186,779 employees at the end of September last year, according to company filings.
The robotics software company Intrinsic, another unit in Alphabet’s Other Bets, also said on Wednesday it would let go of 40 employees. A spokesman said the “decision was made in light of shifts in prioritization and our longer-term strategic direction.”
Verily has recently looked to pare back a once-sprawling collection of projects spanning insurance to mosquito breeding. Last year, the company hired McKinsey & Co. and Innosight to do consulting work, The Wall Street Journal reported.
The reorganization is a sign of the continued difficulties facing big tech companies trying to crack the healthcare industry.
David Feinberg,
the head of an ambitious health-focused group at Google, left the company in 2021 to become CEO of the healthcare technology company Cerner Corp.
In the email to employees, Mr. Gillett said Verily would largely focus on products related to research and care, while concentrating more decisions in a central leadership team rather than individual groups.
Mr. Gillett took over as Verily CEO this month, succeeding the well-known geneticist
Andy Conrad,
who moved to executive chairman.
“As we move into Verily’s next chapter, we are doubling down on our purpose, with the goal to ultimately be operating in all areas of precision health,” Mr. Gillett wrote to employees on Wednesday. “We will do this by building the data and evidence backbone that closes the gap between research and care.”
Google’s peers have cut jobs recently in response to worsening economic conditions and a decline in online advertising. Last week,
Amazon.com Inc.
announced layoffs that will affect more than 18,000 employees, the most of any tech company in the past year.
Tech Layoffs Across the Industry: Amazon, Salesforce and More Cut Staff
At a companywide meeting in December, Google CEO
Sundar Pichai
said he couldn’t make any forward looking commitments in response to questions about layoffs. Google has tried to “rationalize where we can so that we are set up to better weather the storm regardless of what’s ahead,” he added.
Activist investor TCI Fund Management called on Alphabet in November to reduce losses in Other Bets such as Verily, writing in a letter to Mr. Pichai that the company had too many employees.
Alphabet’s Other Bets recorded $1.6 billion in operating losses from $209 million in revenue during the third quarter last year, mostly from the sale of health technology and internet services.
Verily said in September it received $1 billion in funding from Alphabet and other investors, without naming the backers. The private-equity firm Silver Lake, Singaporean fund Temasek Holdings and Ontario Teachers’ Pension Plan previously invested in the company.
Write to Miles Kruppa at miles.kruppa@wsj.com
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