Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent company of Google, is ramping up its cost-cutting measures across various ventures.
Verily Life Sciences, an Alphabet unit focusing on data-driven healthcare, plans further expense reductions after reporting higher-than-anticipated losses in 2023.
Verily laid off more than 200 employees, or about 15% of its workforce, in January.
Verily Life Sciences posted wider-than-expected operating losses through June, missing its projections by $17 million, the Wall Street Journal report said.
Last year, operating losses totaled $568 million on revenue of $559 million.
Verily is part of Alphabet's Other Bets unit, a group of companies operating independently from Google under a holding structure established by former CEO Larry Page in 2015.
These businesses have accumulated over $30 billion in losses since Alphabet started reporting their finances separately.
The Other Bets companies are now pressured to reduce spending and convert research into commercial profits.
Verily's CFO, Utpal Koppikar, acknowledged to employees that the company was underperforming but reassured them that Google would continue to provide the necessary funding.
Verily's products range from clinical-research trial management software to self-funded employer health plan insurance.
Other tech giants, such as Amazon.com (NASDAQ: AMZN) and Meta Platforms Inc (NASDAQ: META), have recently trimmed projects with no immediate commercial viability.
As part of its cost-cutting, Verily also spends several million dollars per year to separate operations from Google, a project known internally as "Flywheel." It aims to finish by 2025 and already cost $49 million in the first half of this year.
Separately, Verily agreed to move its headquarters to San Bruno, California, to an office currently accommodating YouTube employees. The change will save at least $100 million over a traditional 10-year lease.