Google and YouTube parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a “Magnificent Seven” member with investments in artificial intelligence technology. The bull case for GOOG stock is strong, but some traders might be concerned about Alphabet’s layoffs. There’s no need to worry, though, since Alphabet’s job cuts are probably necessary for the company’s long-term growth.
Of course, Alphabet isn’t the only “Magnificent Seven” company to implement layoffs in recent years. Sensible investors can choose to stay the course with Alphabet stock, as the company is still a highly profitable technology juggernaut. Still, it’s important to know the basic facts about the layoffs, so let’s delve into the details now.
Job Cuts Shouldn’t Be a GOOG Stock Deal-Breaker
If you’re thinking about buying and/or holding GOOG stock, the latest round of Alphabet layoffs shouldn’t be a deal-breaker. Put everything in context, and you’ll see that Alphabet is letting go of hundreds of people, but it’s only a small part of the company’s full workforce.
Here’s the scoop. Reportedly, Alphabet is eliminating jobs at voice-activated software division Google Assistant, as well as at Google’s Nest, Pixel and Fitbit divisions.
“We’re responsibly investing in our company’s biggest priorities and the significant opportunities ahead,” a Google spokesperson explained.
First of all, none of this should be too surprising. A year ago, Alphabet stated that the company plans to eliminate around 12,000 jobs.
Bear in mind, Alphabet and some other technology-focused large-cap businesses over-expanded their workforces at the beginning of the Covid-19 pandemic. Now, these companies are in retrenchment mode, so job cuts are a necessary part of cost-cutting.
In addition, Alphabet is undoubtedly trimming down Google Assistant and some other divisions in order to focus more on generative AI technology. It’s crucial for Alphabet to make moves like this in order to compete successfully in the gen-AI space.
Alphabet Stock Investors Must Look at the Big Picture
Alphabet isn’t in trouble just because the company is cutting costs and refocusing on gen-AI. Look at the big picture, and remember that Alphabet is a gigantic company with solid revenue growth.
And if you’re seeking exposure to the AI-tech market, Alphabet stock is a good pick for multiple reasons. For example, Google is investing heavily in AI company Anthropic. Furthermore, Google Cloud recently rolled out new gen-AI products specifically for retailers, including branded chatbots.
Alphabet continues to innovate and develop new concepts outside of gen-AI. For instance, according to Reuters, Google is working with the government of Chile to “build the first undersea fiber-optic cable between South America and Asia Pacific.”
With this project, Alphabet isn’t just building new potential revenue-generating opportunities. The company is also pioneering paths of connectivity on an international scale. According to Chilean President Gabriel Boric, the undersea cable project will “open opportunities for new industries, jobs and better work and life conditions for thousands of people.”
GOOG Stock Is Still a Sensible Pick for 2024
Layoffs are always unfortunate events. However, Alphabet’s job cuts are probably necessary in order to reduce costs and allocate more time and effort toward crucial AI-related endeavors.
In the final analysis, there’s no need to fret about Alphabet’s latest round of layoffs. Instead, consider how the company is growing its market footprint in gen-AI and elsewhere. With that in mind, just relax, don’t worry too much, and consider a buy-and-hold position in GOOG stock in 2024.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.