As layoffs ripple their way across Alphabet Inc., the latest to see cuts is the innovation lab of Google LLC.
The "moonshot factory" X has laid off dozens of employees and is now turning to venture capital to fund further endeavors, an X spokesperson confirmed to the Business Journal. According to an email obtained by Bloomberg, the move is part of a developing structure at the Mountain View-based lab to better enable projects can spin out and function as independent startups.
"We’re expanding our approach to focus on spinning out more projects as independent companies funded through market-based capital," wrote Astro Teller, who leads X, in an email to staffers. "We’ll do this by opening our scope to collaborate with a broader base of industry and financial partners, and by continuing to emphasize lean teams and capital efficiency.”
The company did not specifically say how many people would be affected, but said the layoffs will mainly impact support staff.
The lab has been a catalyst for innovation with companies such as autonomous diving vehicle company Waymo LLC and robotics software company Intrinsic Innovation LLC graduating and spinning out from X.
As companies look to graduate from X, they often are left waiting for parent company Google to accommodate a spot to function under its independent venture arm. With only so many spots open, startups in the lab must choose between waiting or going out on their own, Bloomberg reported, citing sources close to the matter.
The most recent company to forge its own path was 280 Earth Inc., a Mountain View-based clean energy company looking at ways of removing carbon dioxide directly from the air.
X, originally launched by Google co-founders Larry Page and Sergey Brin, has sought to be a hub for creating "radical new technologies to solve some of the world’s hardest problems." Even with layoffs, Teller said the move will further drive the subsidiary to continue that mission.
"This approach will give us more opportunity to focus on what Xers do best: inventing breakthrough technologies to help solve some of the world’s most pressing challenges," read Teller’s note to staffers. "Because the world needs moonshots more now than ever."
In order to keep that mission going, X executives have met with private equity firms, sovereign wealth finds, strategic investors, in addition to venture capitalist.
The move comes as X’s parent company has laid off hundreds this year. In 2023, Google cut 6% of its global workforce, or 12,000 jobs.
