Google parent Alphabet Inc. is shutting down its artificial intelligence research office for DeepMind Technologies Ltd. in Edmonton, as the technology giant chops about 12,000 jobs worldwide in a cost-cutting measure during a sectorwide slowdown.
DeepMind, a wholly owned subsidiary of Alphabet GOOGL-Q, is consolidating across Canada, the company said in a statement. It is based in Britain, where it is also laying off an unknown number of operational staff.
Locations in Toronto and Montreal, which are within Google’s offices there, will continue to operate as normal. Some researchers in Edmonton have been offered the option to relocate to another DeepMind office. The company, which was acquired by Google in 2014, has research centres in Canada, France and the United States.
Alphabet chief executive officer Sundar Pichai said late last week that 6 per cent of Alphabet’s global work force will be laid off. The cuts are on top of massive layoffs at Amazon.com Inc. and Microsoft Corp., as tech companies face pressure to tighten their operations. Macroeconomic challenges, amid higher interest rates and inflation, are prompting many tech firms to slow their hiring and get leaner on all fronts.
At a companywide town hall held on Monday, Mr. Pichai reiterated that Alphabet’s wide-ranging cuts will affect all product areas, functions, levels and regions. He said some employees outside the U.S., including those in Canada, have yet to be informed about whether their jobs are affected by the layoffs and what their severance packages will look like.
Luiza Staniec, Google’s Canadian spokesperson, declined to provide details about the cuts, referring back to Mr. Pichai’s memo, which stated that the process for layoffs “will take longer due to local laws and practices” for non-U.S. workers.
Tensions among Alphabet employees were high at Monday’s town hall. Google executives were asked about why they hadn’t informed their managers in advance about the impending cuts.
Workers also questioned the company’s communications strategy. Rick Osterloh, senior vice-president of devices and services, replied that Google had deliberately chosen not to share a complete list of people being laid off. Google wanted employees to share the information “on their own terms,” Mr. Osterloh said, according to an audio recording of the meeting obtained by The Globe and Mail. Decisions were based on “a principle of respect for people’s privacy,” he said.
The Edmonton location for DeepMind is the only international office directly managed by the subsidiary; the rest are all in buildings that are managed by Google. That means Edmonton was far more “resource intensive” to keep afloat than other locations, DeepMind said.
DeepMind has a relatively small staff of under 1,500 employees worldwide, according to a LinkedIn analysis, which suggests only a dozen or so workers are based in Canada.
The company’s Edmonton location launched in the summer of 2017 to much fanfare. It was lauded by politicians of all stripes and considered a boon for the economy of Alberta, where DeepMind closely collaborated with the University of Alberta.
In an opinion piece for the Calgary Herald on Monday, just before the DeepMind closing, Rick Christiaanse, chief executive officer of Invest Alberta, said global investment from companies such as Google play a “pivotal role in the prosperity of Alberta communities,” naming DeepMind in particular.
Invest Alberta did not respond to requests for comment on Tuesday.
In a statement, Matina Kalcounis-Rueppell, interim dean and vice-provost of the University of Alberta, said she is “saddened” by the loss of DeepMind in Edmonton, especially because it was “instrumental” for its top-ranking AI program and “drawing in new talent and investment from companies, government and other supporters.” But she said the university will continue to invest and collaborate in AI through other means.
Lindsay Harvey, a spokesperson for Edmonton mayor Amarjeet Sohi, said news of DeepMind’s “unfortunate” closing had not reached Mr. Sohi’s office until The Globe’s request for comment. In a statement, Ms. Harvey said local businesses “of all sizes and stages, from breweries to pipeline engineering companies have leveraged and benefited” from relationships with DeepMind, and the city will continue to cultivate such partnerships with other companies.