Google parent cuts 12,000 jobs as tech layoffs deepen

STORY: Shares of Alphabet jumped more than 5% on Friday, after the Google-parent company said it's cutting about 12,000 jobs, as the tech sector reels from a string of layoffs and companies stake their futures on artificial intelligence.

The announcement comes at a delicate moment for the U.S. tech giant, which has long been the leader in key areas of AI research.

Joseph Bonner is a technology, media and telecom analyst at Argus Research.

“We're in a very uncertain macro environment, you know, particularly around digital advertising, which is the lifeblood of Alphabet and Google. Over the long-term, I still think it's a great company. I mean, the technology is some of the best in the industry. Search advertising still is doing well. There's been some concern around the ChatGPT, the new AI kind of text-based interface, that could be a problem in, sometime in the future, but I don't think that's a real long-term issue. So right now, I still see the company as still very viable."

But industry observers said so-called generative AI may test Google's dominance in internet search after Microsoft-backed startup, OpenAI, released the chatbot known as ChatGPT that can answer queries with human-like responses.

Microsoft this week said recession worries were forcing it, too, to shed 10,000 jobs, but said it would focus on loading its products with more AI going forward. Alphabet's CEO Sundar Pichai echoed that sentiment in his layoff memo to staff.