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

The Zhitong Finance App learned that, according to reports, in the face of large-scale spending in the field of artificial intelligence (AI), Google (GOOGL.US) is seeking to control rising costs, and the company has expanded its employee buyout program to many countries this year. Google confirmed that in June of this year, the company began providing voluntary separation compensation programs to some employees in Canada, France, Germany, Japan, and Switzerland.

A Google spokesperson said in a statement: “In 2025, some of our teams introduced voluntary separation programs with severance compensation. This summer, in June, we will expand the program to a few countries around the world to support our important future work.”

The move comes at a time when Google's AI spending continues to rise. As large technology companies compete to build data centers, procure advanced chips, and expand AI computing capabilities, related infrastructure investment continues to drive up corporate capital expenses and operating costs. Large-scale AI investments have made Wall Street uneasy, and are putting pressure on Google's stock price.

The capital expenditure plan previously disclosed by Google further highlights the scale of this investment. The company expects capital expenditure to reach US$195 billion to US$205 billion in 2026, a significant increase from 2025, and also anticipates a further significant increase in capital expenditure in 2027. The company said the investment was mainly for technology infrastructure, including servers, networking equipment and data centers.

In terms of actual expenditure, Google's capital expenditure in the first nine months of 2026 has reached 132 billion US dollars, compared to 63.6 billion US dollars in the same period last year, an increase of more than double. At the same time, investment in infrastructure such as data centers will also bring subsequent depreciation expenses and operating costs such as energy, which will continue to put pressure on the company's income statement. Google also revealed that by the end of September 2026, the total amount of future lease payments corresponding to lease agreements signed by the company but not yet implemented reached 13.5 billion US dollars. The related leases mainly involved data centers and energy infrastructure.

It is worth noting that Google is not simply completely reducing the size of personnel through layoffs, but is trying to reallocate resources to priority development areas. The report said that the total number of Google employees has continued to grow in recent quarters, but the company has been seeking to shift human resources to a more strategic priority business. Chief Financial Officer Anat Ashkenazi emphasized in multiple quarterly earnings presentations that AI and cloud computing remain key recruitment areas for the company. The previous voluntary separation program excluded employees from Google Cloud and DeepMind, an artificial intelligence research division, and the expanded plan seems to continue with similar arrangements.

This means that Google's current personnel adjustments are closer to optimizing the organizational structure around AI strategy: on the one hand, reducing the personnel and cost burden of some business departments through voluntary separation programs; on the other hand, continuing to allocate funds and talents to AI research and development, cloud computing, and related infrastructure fields. As AI technology gradually penetrates core businesses such as search, advertising, cloud services, and enterprise software, companies need to re-evaluate the personnel needs, business priorities, and resource use efficiency of different departments.

It is worth mentioning that Microsoft (MSFT.US) also said last week that it will open a voluntary separation compensation plan to about 60,000 employees to reduce costs, reshape the personnel structure, and adapt to the business layout in the AI era. The plan covers more than a quarter of the total number of Microsoft employees worldwide, involving some employees in the US, Canada, India, and the United Kingdom. Some departments and positions are not covered.

Microsoft's current adjustments also occurred against the backdrop of continued expansion of investment in AI infrastructure. As investment in AI data center construction, chip procurement, and model development continues to increase, tech giants are facing the challenge of how to control overall operating costs while maintaining investment in technology. Google and Microsoft have successively introduced voluntary separation programs, which also reflects that large technology companies are re-examining traditional staffing methods and trying to focus more resources on AI-related businesses.

The report said that Google's latest round of buyout plans was launched on the basis of previous relevant plans. Since last year, Google has offered voluntary separation plans to employees in some departments in the US and the UK. Executives have described the program as an option for employees who no longer agree with the company's growth pace or strategic direction. The report also pointed out that in at least one case, Google carried out another round of layoffs after providing a voluntary separation plan to a certain department.

In Switzerland, Google has around 5,000 employees and a large engineering R&D center in Zurich. People familiar with the matter said that the plan covered several departments, but DeepMind was not included. After Google introduced a voluntary separation compensation program in Switzerland, employees began leaving their jobs one after another in August.

People familiar with the matter said that Google announced the relevant compensation plan in mid-June and informed the employees who submitted the application about the approval results by mid-July. Employees receiving the scheme can receive compensation equivalent to one month's wage for every year of work, up to a maximum of 12 months' salary. A person familiar with the matter said that in a team of about 50 employees, at least 4 people accepted the plan.

Notably, Google has also previously made personnel adjustments in Switzerland. In 2023, the company cut more than 200 employees in Switzerland, which sparked employee protests and strikes. This voluntary termination program covers multiple departments and once again reflects Google's continuing trend of allocating personnel among different business teams around the world.

Overall, Google's expansion of the voluntary employee termination program does not mean that the company is cutting investment in the AI field. In contrast, with AI infrastructure capital spending continuing to grow, the company is trying to focus capital and human resources on strategic key areas such as AI and cloud computing by adjusting personnel structures and controlling non-priority business costs. For investors, the future focus is not only on whether Google can continue to expand investment in AI infrastructure, but also whether these huge investments can be converted into revenue growth for search, advertising, and cloud computing businesses, and whether rising depreciation, energy, and personnel costs will continue to put pressure on profit margins and free cash flow.