Google Alphabet's X lab cuts dozens of jobs, seeks outside investors

Lab X, a subsidiary of Google parent company Alphabet, plans to lay off employees and is looking for external investors to support internal projects.

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According to people familiar with the matter, Alphabet’s Communicate and discuss financing matters with other investors. Anonymous people familiar with the matter and an email to employees revealed that X Labs is adopting a new structure to make it easier to separate experimental projects from departments into independent startups with support from Alphabet and external backers. . This initiative aims to further drive innovation and provide more opportunities to better develop and commercialize experimental projects.

X Labs has been courageously exploring cutting-edge technologies to solve major challenges such as climate change and connectivity. However, to date, research findings have not been translated into sustained commercialization opportunities.

Astro Taylor mentioned in the email that X Labs is expanding their approach to focus on spinning out more projects into independent companies and obtaining the support of market capital. To achieve this goal, they will broaden their scope of cooperation and work with more industry and financial partners, while also streamlining their teams and improving capital efficiency.

According to people familiar with the matter, X Lab will lay off dozens of logistics employees. Alphabet did not respond to emails.

X Labs was founded by Google co-founders Larry Page and Sergey Brin. It is committed to a series of cutting-edge technology projects, such as self-driving cars and the Internet of high-altitude balloons. These projects capture the public's interest and imagination. In recent years, however, Alphabet has begun cutting costs, putting more pressure on X Labs to prove it can turn these cutting-edge technologies into profitable market-ready businesses.

Google recently cut hundreds of jobs from its hardware and engineering teams, a move that signals the company will focus more on artificial intelligence and may make further layoffs. Alphabet's chief financial officer Ruth Porat will transition to the company's president and chief investment officer, responsible for managing various departments including X Labs. This adjustment reflects the company's strict monitoring of its financial situation and its emphasis on future development direction.

Wedbush Securities analyst Dan Ives wrote that she will increase laboratory efforts to promote successful business transformation.

According to people familiar with the matter, since its reorganization in 2015, X Labs has been trying to transform its various projects into independent enterprises under parent company Alphabet and incorporate them into the company's "Other Bets" business. However, it is reported that Alphabet can no longer accommodate more "other bets", which has brought a development bottleneck to the X laboratory business that is preparing to take the next step. Within the This situation poses challenges to the future development of X Laboratory.

X Labs employees had explored raising outside capital for their own startups in the past, but they ran into concerns from Alphabet management, according to two people familiar with the matter.

According to people familiar with the matter, in addition to seeking external venture capital this time, X Lab has also contacted family offices, sovereign wealth funds, private equity firms and strategic investors, as well as related industry companies.

At a time when large companies are laying off employees and cutting budgets, various innovative technology laboratories in Silicon Valley have been affected. Last year, Google laid off most of the jobs at Area 120, the company’s in-house startup incubator. X Labs also shed some jobs last year, but now it’s making bigger changes.

This approach will give us more opportunities to focus on what X employees do best: developing breakthrough technologies that help solve some of the world’s most pressing problems, Taylor wrote in an email to employees. Challenge." "Because the world needs cutting-edge projects now more than ever."

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