Google Fiber Told to Cut Staff in Half

by Cate Lecuyer  |  08.25.2016

Alphabet is putting pressure on Google Fiber to cut its workforce in half, citing low subscriber numbers and a shift toward cheaper wireless technology.

Last month Alphabet CEO Larry Page ordered Google Fiber chief Craig Barrat to reduce the team from 1,000 to 500 people, according to The Information.

Google Fiber delivers ultra-fast internet through fiber optic cables, and also offers a traditional TV bundle that competes with other cable and telecommunication services. The broadband Internet system provides TV service for $120/month, with access to more than 200 channels as well as Google-owned YouTube. 

The company has been expanding but the high cost of laying down fiber optic piping leaves questions as to the sustainability of its business model, particularly in light of cheaper costs associated with wireless services and slow customer growth.

Google Fiber first launched in Kansas City in 2012 and grew to include seven metropolitan areas, with plans to launch in 16 more markets including Los Angeles, Chicago and Dallas.

While the service went live this week in Salt Lake City, it delayed plans to install fiber lines in San Jose, Calif. in July and suspended a project in Portland, Ore.

In 2014 the company had roughly 200,000 Internet subscribers and failed to meet its goal of 5 million. While updated data hasn’t been released the number of subscribers is “still well short of initial expectations,” The Information reports.

“It’s believed that the company’s TV subscriber sign-up totals have been even worse, with one analyst last March suggesting that Google Fiber had just 53,390 pay TV subscribers as of the end of last year,” according to DSLReports.

READ MORE: The Information, Variety, The Verge, DSLReports

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