Self-driving vehicle operation Waymo is one of the businesses housed in Alphabet’s Other Bets.
Courtesy of Waymo
Alphabet
is putting pressure on businesses held in its Other Bets division to control their costs. It’s a sign of a tough stance from Ruth Porat as she prepares to take up her new role as president of the company.
Alphabet
(ticker: GOOGL), the owner of Google, is pushing the companies held in Other Bets to show they can turn their research into commercial profit, The Wall Street Journal reported, citing people familiar with the matter.
The division contains businesses that operate separately from Google including self-driving vehicle operation Waymo and healthcare company Verily Life Sciences. Verily is already planning additional expense cuts after losing more money than expected so far in 2023, according to the WSJ.
Alphabet didn’t immediately respond to a request for comment from Barron’s on the planned cost controls.
The shift in priorities looks to coincide with Porat having a more significant role in Alphabet. Currently chief financial officer, Porat will step into the newly created role of president and chief investment officer of Alphabet and Google on Sept. 1 and have direct oversight over Other Bets . She has been one of the driving forces behind enforcing commercial discipline on the segment’s various businesses, according to the WSJ.
“The promotion of CFO Ruth Porat to President and CIO [Chief Investment Officer]…could bring greater scrutiny to “Other Bets” and enhance cash return,” analysts at Melius Research wrote in a recent research note.
Alphabet joined in the wave of mass technology layoffs earlier this year, saying it would cut 12,000 jobs. Verily Life Sciences and robotics software company Intrinsic –both housed within Other Bets– were among the units affected by the layoffs.
Write to Adam Clark at [email protected]
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