Alphabet to cut staff of health sciences unit Verily by 15%

In an email to employees on Wednesday, Verily CEO Stephen Gillett said the company will lay off 15% of its staff in a restructuring move, as it strives for financial independence from parent company Alphabet. The cuts will affect about 240 people, a Verily spokesperson confirmed.

Verily, which specializes in health sciences, is one of Google’s sister companies, operating within Alphabet’s “Other Bets” category.

It’s the first known layoff to hit the Google parent company following a wave of industry layoffs and fears of a recession. Although Google has so far avoided the widespread job cuts that have hit other tech companies like Meta, employees have grown anxious if they could be next, CNBC has reported.

Gillett’s email instructed staff to work from home for the remainder of the week as Verily’s physical offices will be closed on Thursday and Friday. “Those who are in the office the office today can return home now,” it stated, specifying that the instruction also goes for employees who work from Google offices.

Some of Verily’s projects have included a contact lens that can detect diabetes symptoms, which was halted in 2018, and Project Baseline, an effort to aggregate health data with research organizations. It also provided a Covid-19 testing platform, which former President Trump highlighted at the start of the pandemic. 

Some of Alphabet’s Other Bets include their own equity structure, CFO Ruth Porat explained in 2019, and Verily has been raising money from outside investors for several years. In 2017, Verily took in $800 million of outside capital from Singapore’s Temasek, and has since raised more than $2 billion in several more equity rounds.

Gillett said the cuts reflect discontinued programs and team “redundancy,” according to the emails, which were viewed by CNBC. It says it will offer severance and outplacement services “in the coming weeks and months” but did not provide details yet.

Gillett’s note stated that it will be “reducing or sunsetting” some parts of the business while increasing investment in others. Specifically, Verily will be discontinuing some early stage products, including “remote patient monitoring for heart failure and micro needles for drug delivery,” the email states. “We cannot do everything and have had to make some difficult choices,” wrote Gillett. The email said the company would hold an all-hands meeting Jan. 18 to explain the changes in more detail.

Gillett’s note also outlines several executive changes and the departure of Jordi Parramon, the president of Verily’s devices businesses who had been with the company “since its early days.”

The note said the company will notify laid off employees with an email sent to their Verily and personal emails entitled “Important Update Regarding Your Role.” Those who still have jobs will receive an email titled “Your Role at Verily.” Those who work out of the U.S. will hear from their business leaders on Wednesday or Thursday, the note stated.

“While communicating via email is not ideal, this was a deliberate decision, enabling us to communicate as efficiently and simultaneously as possible. We’re also taking today and the rest of the week to ensure each impacted Veep has a personal discussion with a leader and HR partner to discuss the details, answer questions, and provide support through the transition,” read the note.

“As we move into Verily’s next chapter, we are doubling down on our purpose, with the goal to ultimately be operating in all areas of precision health,” the note stated. “We will do this by building the data and evidence backbone that closes the gap between research and care. We will also focus on building a financially independent company and a thriving company culture.”

Alphabet and Verily declined to comment further.