In 2010, Google announced plans to bring Internet that’s 100 times faster with Google Fiber. Since then, the company laid fiber optic Internet connections in only a handful of cities such as Kansas City and Austin. But plans to bring this high-speed service to other cities such as Los Angeles, Dallas, and Oklahoma City have been suspended.
It appears that Google has underestimated costs related to bringing fiber optic Internet connections across the nation. Now, Google Fiber is planning layoffs, according to CNN Money report. Perhaps, as many as 9% of employees will lose jobs. Overall, 100 or so jobs will go which, indeed, is a small percentage of all employees at the entire company.
Google, now known as Alphabet, has lost over $850 million in the second quarter of this year in the so-called “other bets” division, of which Fiber is part.
“It shouldn’t be a surprise to anyone that building digital infrastructure is an incredibly costly undertaking, and it also shouldn’t be a surprise that it’s not a terribly profitable one,” stated Craig Moffett, telcom analyst. Of course, it doesn’t mean that Google is unprofitable in other areas.
Now, Google is seemingly coming back to Earth with some of its projects as the company seeks to reduce costs. Also, the focus now is on wireless technology rather than cable, so Fiber is not on a priority list, although Google hasn’t announced its liquidation. If there’s a promise of future success, Google will carry on with Fiber.