What you need to know
- Alphabet announces its financial earnings for the first quarter of 2023
- The company generated $68.9 billion in revenue, an increase of 3% compared to the same period last year.
- Major layoffs at the start of the year resulted in nearly 12,000 job cuts.
- Google recently announced an increased focus on AI as it merges its two major AI teams.
Alphabet, the parent company of Google, announced its financial earnings for the first quarter of 2023 on Tuesday. The company reported revenue of $69.8 billion, up 3% year-over-year and just above analyst expectations.
Search revenue improved slightly, accounting for more than $40 billion in Alphabet’s revenue. However, revenue from YouTube ads declined, likely as a result of lower spend by advertisers, which the company noted in its previous quarter results. It comes amid Susan Wojcicki stepping down from her position as CEO.
Meanwhile, “Google Others” revenue, which usually represents device sales, saw some growth, which could drive interest in the company’s latest Pixel 7 smartphone.
Alphabet has undergone some major adjustments as it has refocused the company on efficiency and artificial intelligence. In January, Alphabet announced that it would lay off 12,000 employees, an unfortunate result of the pandemic hiring surge over the past few years. As a result, Alphabet notes that the financial results reflect “$2.6 billion in fees related to reductions in our workforce and office space.”
Additionally, Google is going full steam ahead with its AI efforts as it seeks to cover up lost ground against ChatGPT with Bard, its in-house AI chatbot. While the company has always invested in developing its own AI, it has done 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 earnings ($191 million) after consecutive losses.
Google is expected to have an exciting quarter as it gears up for its upcoming I/O developer conference, where it will no doubt make several big announcements. Among them are the long-rumored Pixel Fold that is expected to rival foldable phones from Samsung and other companies, as well as the Pixel Tablet, which will also act as a smart home device of sorts.
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