Google reduces Area 120 funding and cuts projects by half

Google LLC has made cuts at its Area 120 tech incubator, reducing funding and cutting about half of the unit’s current projects and teams.

Area 120 was created in 2016 to keep some of the company’s wannabe entrepreneurial talent in-house. The idea behind the incubator is that employees can develop their ideas and gain access to Google’s data, products and resources instead of leaving to create their own startup.

Bloomberg reported Wednesday that some teams at Area 120 were notified this week that their projects had been reorganized or canceled. Affected workers are said to have been told that they need to find new roles at Google within a specific time period or lose their jobs.

Google confirmed the changes at Area 120, though not exact numbers, saying that the unit was “shifting its focus to projects that build on Google’s deep investment in AI and have the potential to solve important user problems.”

“As a result, Area 120 is winding down several projects to make way for new work,” a spokesperson told Bloomberg. “Impacted team members will receive dedicated support as they explore new projects and opportunities at Google.”

Reports that Google was looking to make changes across the board came in July when Chief Executive Officer Sundar Pichai sent a memo to employees saying that the company would cut back on hiring and concentrate on consolidating investments next year. Pichai said Google would begin pausing the development of new products and start “redeploying resources to higher priority areas.”

Forward to August, and it was reported that Google was set to lay off employees amid the worsening global economy. It was claimed that Google had suspended hiring new employees and told some existing employees to “shape up or ship out” if expectations were unmet.

Employees said in August that they feared that there would be significant layoffs. Although the news from Area 120 are not strict layoffs since employees can apply for new roles, the program cuts and the potential that employees could lose their jobs could be the first outward indication of Google’s plans to cut employees.

Previously successful Area 120 projects, none of which are households names but have been integrated into other products, include HTML 5 gaming platform Gamesnacks, which is now part of Google Chrome; an AirTable service called Tables that’s now part of Google Cloud; and AdLingo, an AI-powered ads platform.

Photo: Sikander/Wikimedia Commons

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