Alphabet(GOOGL.US) is reportedly downsizing its cloud division to allocate resources for AI and other businesses.

Alphabet Inc. (GOOGL.US) unit Google on Wednesday cut jobs in its cloud division, according to people familiar with the matter. The layoffs affected fewer than 100 sales employees, the people said, as the company seeks to free up resources to invest in its business and artificial intelligence. A Google spokesperson said in a statement that the company will continue to make changes to "meet the needs of our customers and the significant opportunities of the future." "We are making changes, as our entire company has, to continue to invest in areas critical to our business and ensure our long-term success," the spokesperson said. The layoffs come after Google's cloud business slowed and the tech giant has invested heavily in artificial intelligence. Earlier this month, Alphabet reported cloud revenue that fell short of expectations, and its 2025 capital spending guidance was far above expectations. Google has also gone through several rounds of layoffs. Earlier this month, the company announced a "voluntary separation program" for employees in its platforms and devices division. Throughout 2024, Google gradually restructured its departments, laying off employees across the company. In the new year, layoffs have become almost routine for US tech companies. Amazon, Meta Platforms, Salesforce and Microsoft have all said they will cut underperforming employees or seek to hire cheaper international labor. These companies are under pressure to invest in artificial intelligence technology without hurting profits. As Google's search business matures, its cloud business is seen as one of the main drivers of Alphabet's growth and remains a key area of investment. In February's earnings call, Alphabet chief financial officer Anat Ashkenazi said the company expects "to see growth in headcount in key investment areas such as AI and cloud computing in 2025." Google's cloud business has been a key area of investment for the company. In 2022, the company invested $21.5bn in capital expenditures, up 22 per cent from the previous year. The company also invested $12.5bn in capital expenditures in 2021, up 22 per cent from the previous year.