Google Offers Buyouts in Search Ads Division Amid Quiet Restructuring — Are Buyouts the New Layoffs?

In a significant development, Google has extended buyout offers within its Search Ads division, signalling a quiet restructuring behind the scenes.

As CNBC uncovered, Google presented buyout opportunities to employees across various divisions on Tuesday. These included teams in its knowledge and information, central engineering, marketing, research, and communications departments.

This decision prompts a crucial question: Are voluntary buyouts emerging as the latest iteration of workforce reductions?

Google's Shifting Workforce Strategy

The unit known as Knowledge and Information (K&I) encompasses Google's search, ads, and commerce divisions.

Tuesday's buyouts represent the company's most recent initiative to decrease its workforce, a process Google has maintained in phases since its 2023 reduction of 12,000 employees.

CNBC could not verify the number of employees affected by this recent series of buyouts. Previously, The Information indicated that the company had offered buyout options to staff within its search and ads division.

Understanding The 'Voluntary Exit Program'

The 'voluntary exit program' is open to US-based employees, and Google has confirmed that some teams also require remote workers living within 50 miles of an office to return. These employees will need to adopt a hybrid work schedule 'in order to bring folks more together in-person.'

'Earlier this year, some of our teams introduced a voluntary exit program with severance for US-based Googlers, and several more are now offering the program to support our important work ahead,' Google spokesperson Courtenay Mencini wrote in an emailed statement to CNBC.

Inside the K&I Unit Restructuring

The K&I unit employs roughly 20,000 individuals and experienced a reorganisation in October, during which Google executive Nick Fox assumed leadership. On Tuesday, Fox circulated a memo suggesting that employees not meeting expectations might consider the buyout while encouraging those performing well and enthusiastic about their work to stay with the company.

'I want to be very clear: If you're excited about your work, energised by the opportunity ahead, and performing well, I really (really!) hope you don't take this! We have ambitious plans and tons to get done,' Fox wrote in the memo, which CNBC reviewed.

'On the other hand, this VEP offers a supportive exit path for those of you who don't feel aligned with our strategy, don't feel energised by your work, or are having difficulty meeting the expectations of your role.'

These buyouts follow finance chief Anat Ashkenazi's statement in October, where she indicated that a key objective would be to implement further cost reductions as Google ramps up its investment in artificial intelligence infrastructure during 2025.

Google is also revamping a widely used internal learning platform, pivoting its focus towards training employees to integrate contemporary AI tools into their work. As CNBC reported on Tuesday, this signifies a move away from certain 'nice-to-have' programmes towards more business-critical provisions.

Are Buyouts The New Layoffs?

Google has made several buyout offers across a few units this year, establishing it as a favoured approach for reducing its workforce.

In January, the 'Platforms and Devices' unit—Google's hardware division comprising 25,000 full-time staff dedicated to Android, Chrome, ChromeOS, Google Photos, Google One, and Pixel devices—offered full-time, US-based employees the chance to apply for a buyout.

In February, Google's human resources department, People Operations, made voluntary buyout offers. A company spokesperson confirmed on Tuesday that Google's legal and finance teams have also announced similar buyouts this year.

Executive Perspectives And Employee Impact

For the People Operations buyouts, employees at mid-to-senior levels were given severance packages, including up to 14 weeks of salary plus an extra week for each complete year of service.

In his Tuesday memo, Fox noted he'd been 'paying close attention' to other units' buyout offerings. He decided to offer buyouts after receiving positive feedback from them.

Google's shift to buyouts follows backlash from its January 2023 layoffs, which cut 6% of its workforce. At that time, CNBC reported that employees, including long-term staff, high performers, or those on medical/maternity leave, unexpectedly lost system access.

Despite stellar earnings, the wide and sudden 2023 layoff fractured trust and lowered morale. Executives later acknowledged this impact. Earlier this year, CNBC reported that some employees commended Google's choice to offer buyouts over immediate layoffs.

However, buyouts often come with a demand: office returns. CNBC reported in April that Google has required some remote staff to return or face broader cost cuts.