AI investment continues to increase, cost control pressure rises, Google (GOOGL.US) expands scope of voluntary employee buyout program

According to Wallstreetcn, it has been reported that in light of large-scale spending in the artificial intelligence (AI) sector, Google (GOOGL.US) is seeking to control rising costs by expanding its employee buyout programs to multiple countries this year. Google has confirmed that in June this year, the company began offering a voluntary severance package to some employees in Canada, France, Germany, Japan, and Switzerland.

A Google spokesperson stated in a press release: “In 2025, some of our teams introduced voluntary departure programs with severance packages. In June this year, we expanded that program to a small number of countries globally to support our critical future work.”

This move comes at a time when Google's AI spending is constantly climbing. As major tech companies race to build data centers, purchase advanced chips, and expand AI compute power, the investment in these infrastructures continues to drive up both capital spending and operating costs. Massive AI investments have made Wall Street uneasy and have also placed pressure on Google's stock price.

Google’s previously disclosed capital expenditure plans further highlight the investment scale. The company expects capital expenditure to reach $195 billion to $205 billion in 2026, a significant increase from 2025, and anticipates a further significant increase in 2027. The company stated that these investments are mainly allocated to technical infrastructure, including servers, network equipment, and data centers.

In terms of actual spending, Google’s capital expenditures for the first nine months before 2026 has reached $132 billion, compared to $63.6 billion for the same period last year, an increase of over 100%. Meanwhile, investments in infrastructure like data centers will continue to generate future depreciation expenses, as well as operating costs like energy, placing ongoing pressure on the company’s financials. Google also disclosed that as of the end of September 2026, it had signed, but not yet commenced, lease agreements for a total future rental payment of $130.5 billion, mainly involving data centers and energy infrastructure.

It is worth noting that Google is not simply reducing its headcount through layoffs; instead, it is attempting to reallocate resources to priority development areas. Reports indicate that Google’s total staff count has continued to grow over recent quarters, but the company has consistently sought to shift human resources toward business areas with greater strategic priority. Chief Financial Officer Anat Ashkenazi has emphasized in several quarterly earnings presentations that AI and cloud computing remain the company's recruitment focus areas. Previous voluntary departure plans had excluded employees from Google Cloud and the AI research division DeepMind, and the new expanded program appears to maintain a similar arrangement.

This means Google’s current staffing adjustments are more closely aligned with organizational restructuring around its AI strategy: on one hand, reducing personnel and cost burdens in some business units through the voluntary departure program; on the other hand, continuing to allocate capital and talent toward AI R&D, cloud computing, and related infrastructure fields. As AI technology steadily permeates core businesses such as search, advertising, cloud services, and enterprise software, the company needs to reassess staffing requirements, business priorities, and resource utilization efficiency across departments.

It is noteworthy that Microsoft (MSFT.US) also announced last week that it would offer voluntary severance packages to about 60,000 employees, aiming to cut costs and reshape its workforce structure to align with business strategies for the AI era. This program covers more than a quarter of Microsoft’s global workforce, affecting some employees in the US, Canada, India, and the UK, while certain departments and positions are excluded.

Microsoft’s adjustment is also happening against the backdrop of continued expansion in AI infrastructure investment. As investment in AI data centers, chip procurement, and model development keeps increasing, tech giants are facing the challenge of how to maintain technological investments while controlling overall operating costs. With both Google and Microsoft rolling out voluntary buyout programs, it’s evident that leading tech companies are re-examining traditional staffing models and seeking to focus more resources on AI-related businesses.

Reportedly, Google’s latest buyout program is being launched on the basis of previous related initiatives. Since last year, Google has offered voluntary departure plans to employees in some departments in the US and UK. Executives have described the program as an option for employees who no longer align with the company’s pace of development or strategic direction. The report also notes that in at least one case, after offering the voluntary departure program to a department, Google subsequently carried out a round of layoffs.

In Switzerland, Google has about 5,000 employees and hosts a large engineering R&D center in Zurich. Insiders revealed that the current program covers several departments but does not include DeepMind. Following the rollout of the voluntary buyout program in Switzerland, employees began leaving the company gradually starting from August.

According to informed sources, Google announced the relevant severance offer in mid-June and informed employees who applied by mid-July whether their applications were approved. Employees who accepted the offer receive compensation equivalent to one month’s salary for each year of service, up to a maximum of 12 months’ salary. One insider mentioned that in a team of around 50 people, at least 4 accepted the offer.

It is notable that Google has previously adjusted its workforce in Switzerland. In 2023, the company cut more than 200 positions in Switzerland, which sparked employee protests and strikes. The current voluntary departure plan covers multiple departments, reflecting Google's ongoing trend of reallocating personnel among its different global business teams.

Overall, Google’s expansion of its employee voluntary departure program does not mean the company is cutting back on AI investment. On the contrary, with capital spending on AI infrastructure continuing to rise, the company is trying to focus both financial and human resources on strategic priority areas such as AI and cloud computing, by optimizing organizational structure and controlling non-priority business costs. For investors, the key focus in the future will be not only whether Google can continuously enlarge its AI infrastructure investment, but also whether these massive investments can translate into revenue growth for search, advertising, and cloud computing businesses, as well as whether rising depreciation, energy, and personnel costs will continue to pressure profit margins and free cash flow.