Google Fiber ordered to halve staff as Larry Page orders huge costs cut: report

The mystery around what’s happening with Google Fiber just deepened. Alphabet, Google’s parent company, has reportedly directed Google Fiber to cut its staff in half.

Already, Google Fiber has put rollout plans on hold in San Jose, Mountain View, Palo Alto and every other location where it announced intentions to provide the ultra-high-speed internet service but hasn’t obtained access to existing fiber cable or started putting in its own. A source close to the situation told the Mercury News that Google Fiber was exploring alternatives involving wireless internet delivery. Google and Alphabet have kept fairly quiet about the on-again, off-again status of Google Fiber in Silicon Valley and other areas around the country.

Now, with Google Fiber customers numbering fewer than expected, and costs higher than anticipated, Alphabet CEO Larry Page has ordered Google Fiber head Craig Barratt to cut his team in half, The Information reported (paywall) Thursday.

“Alphabet co-founders Mr. Page and Sergey Brin aren’t satisfied with the pace of Google Fiber’s rollout or the costs,” according to The Information. “The main problem is that costs were much higher than Google expected. Mr. Page has also told Mr. Barratt to reduce the current cost of bringing Google Fiber to customers’ homes to one-tenth the current level.”

The report by The Information is based on anonymous sources, one of whom said the Fiber team was on a “short leash” and had been told to solve the project’s problems via wireless solutions.

Those solutions derive in part from technology Google Fiber gained earlier this year through acquisition of internet-service provider Webpass, according to the source who spoke to the Mercury News.

A number of analysts have also hypothesized to the Mercury News that Google Fiber may have announced broad rollout plans in order to spur competitors such as AT&T and Comcast into putting in fiber networks that would allow people to consume more Google faster, putting more ads on Google sites in front of more eyeballs.

 

Photo: A lineman places fiber optic cable in San Mateo (Eugene H. Louie)

 

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  • hoapres

    Just the beginning over at Google. Expect MAJOR being over 10% layoffs within the next 3 to 6 months.

    • FresnoUser

      Yes, the bay area is about due for another tech bubble to burst, causing mayhem, crying, wringing of hands, and economic chaos. At least the insane rents will drop and the freeways will be less crowded.

      • hoapres

        I don’t think the insane rents will drop. Or better put, they won’t drop fast or large enough.

        • Mark

          Maybe the ‘recovery’ this time around will actually be sustainable, based on earning profit, and be staffed with US tech talent instead of inferior foreigners.

          • mikeoco

            Inferior foreigners? Have you traveled in this “great country” much?

  • Jate Naeger

    When the going gets tough… Give up. I guess that’s what shareholders want, despite the vision of Google giving back to the community and not being evil- or something.

  • FresnoUser

    I’m sorry to hear this. I was looking forward to insane internet speeds. My 8 year old retirement home came prewired with underground optical cable, just waiting for Google to connect to it.

  • Mark

    Telecom is generally a low margin business and definitely wasn’t a good fit for Google.

  • mikeoco

    It’s all about selling ads. Service is of no concern.

 
 
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