Google Fiber to cutback following Alphabet rethink - Mobile World Live

Google Fiber to cutback following Alphabet rethink

26 AUG 2016

Larry Page, CEO of Google parent Alphabet, ordered a halving of staff at its under-achieving fibre business, as the company shifts focus to a lower-cost wireless deployment.

According to The Information, Page told Craig Barratt, who is in charge of Alphabet’s Access and Energy unit including Google Fiber, to chop back staff to 500 last month – apparently  representing a halving of the workforce.

Google Fiber has not met its target: It was aiming for five million broadband subscribers in its five years but is falling short. The service had attracted around 200,000 subs by end-2014, which is about two years after launch, according to one former employee.

Page also told Barratt he wants to see the cost of delivering broadband to homes cut by one-tenth, a highly ambitious target even with a shift to wireless tech.

Interestingly, Alphabet CFO Ruth Porat, renowned as a cost cutter, is reported to have intervened on Google Fiber’s behalf to argue the viability of its business model with Page.

Nevertheless, Barratt reportedly considered leaving earlier this year, unhappy at the changes within Alphabet.

This latest report fits with other news emanating from Alphabet about a rethink in how it deploys high-speed network to cities across the US.

According to a recent report, Google Fiber is hoping to use wireless technology instead of fibre in 12 cities, including Los Angeles, Chicago, Dallas and Tampa. The company has suspended fibre build outs in San Jose and Portland.

Google announced the fibre rollout in 2010 and launched first in Kansas City in November 2012. It is now available in six cities (Atlanta, Austin, Charlotte, Nashville and Provo, in addition to Kansas City).

There have also been public musings on the attractiveness of using wireless alongside fibre by CFO Porat, as well as chairman Eric Schmidt.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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