Google Parent Company Alphabet Pressuring Google Fiber To Slash Costs

Hi-Tech Silvia Meyer
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Google’s parent company. Alphabet, is planning a major shakeup at the Internet gigabit division. The unit was formerly known as Google Fiber and is now called Access. While the unit was once focused on providing fast Internet speeds with the use of fiber optic cables, they are shifting their attention to wireless technology.

The CEO of Alphabet, Larry Paige, has issued a demand: reduce current costs related to customer acquisition by 90 percent. He has also asked the chief of Fiber, Craig Barratt, to cut the unit’s workforce in half. Google Fiber is now employing 1,000 people and Paige wants to reduce this workforce to 500.

Fiber’s fate is now uncertain now that the focus has shifted to cutting the cost of providing high speed Internet by using less costly equipment and fewer employees. This is partially due to the fact that the unit has fallen far short of the lofty goals it made for itself back in 2014.

Google Fiber’s primary objective was to sign up 5 million subscribers before the end of 2015 and by this standard, they have fallen far short, with a a mere 200,000 subscribers at the end of 2014. The CFO of Alphabet, Ruth Porat, has defended Fiber’s team, claiming the business model needs more time and still remains viable.

However, the rising cost of fiber optic deployment and Fiber’s highly aggressive roll out strategy have combined to create a shift in strategy for the parent company.

Google Fiber now plans to rely on wireless transmitters to provide Internet access to homes in a variety of major cities. It remains to be seen whether the same Internet speeds can be achieved with the new wireless technology as compared to the previous fiber optics.