Google’s X Lab, Alphabet Inc.’s lab for pioneering technology, is undergoing restructuring and laying off employees as it seeks funding for independent startups. The division, known as X, has been engaging in discussions with venture capitalists and other investors to secure funding for its ventures. The lab is adopting a new structure that will allow its projects to more easily spin out as independent startups with support from Alphabet and outside backers.
X focuses on finding bold approaches to major challenges like climate change and connectivity. However, it has struggled to create sustainable businesses thus far. In an email to staff, Astro Teller, the leader of X, stated that they are expanding their approach to focus on spinning out more projects as independent companies funded through market-based capital. They plan to achieve this by collaborating with a broader base of industry and financial partners, emphasizing lean teams and capital efficiency.
As part of the restructuring, X is laying off several employees, primarily in support staff roles. This move comes as Alphabet, Google’s parent company, is making efforts to cut costs and show that X can turn its speculative bets into profitable businesses. Alphabet recently eliminated hundreds of jobs, particularly in hardware and engineering teams, with more potential cuts on the way as the company refocuses on artificial intelligence. Ruth Porat, Alphabet’s Chief Financial Officer, will now oversee a division that includes X as the company seeks to drive success and viable businesses.
X’s moonshots, which are ambitious and innovative projects, have been seeking to graduate as Other Bets or independent ventures under Alphabet. However, due to limited capacity, X ventures have faced difficulty progressing within the company. As a result, some X employees have explored raising external funding for their projects but have encountered concerns from Alphabet’s leadership.
In addition to pursuing venture capital, X has also met with family offices, sovereign wealth funds, private equity firms, and strategic investors operating in the same industries targeted by their moonshots.
Overall, the restructure and layoffs at X indicate a shift towards greater financial discipline and a focus on developing viable businesses. By embracing outside funding and partnerships, X aims to accelerate the development of breakthrough technologies to address global challenges.
