Alphabet's life sciences arm Verily has eliminated its entire medical device program and laid off associated staff as the company refocuses its healthcare strategy on artificial intelligence and data infrastructure. CEO Stephen Gillett announced the closure in a staff memo on Monday, marking a significant shift in the company's approach to healthcare innovation.
Strategic Pivot Toward AI
"Over the years, Verily has built a legacy in developing world-class, innovative medical devices," Gillett wrote in the internal communication, according to Business Insider. However, he noted that the "path forward requires difficult decisions" as Verily repositions itself around AI and data infrastructure capabilities.
The decision to wind down the medical device program represents what Gillett characterized as a "difficult decision" but one aligned with the company's evolving strategic priorities. The move eliminates an entire division that had been developing medical hardware solutions, though specific details about the affected products or development pipeline were not disclosed.
Broader Alphabet Restructuring
The Verily program closure continues Alphabet's pattern of aggressive cost-cutting measures while simultaneously increasing investments in AI technology. The company has conducted multiple rounds of layoffs across various divisions in recent years, including reductions to its HR and cloud units in February and voluntary exit programs affecting more than 25,000 Platforms & Devices employees during the spring.
Alphabet's most significant workforce reduction occurred in January 2023, when the company eliminated 12,000 positions—representing 6% of its total workforce at the time—in anticipation of an economic slowdown. This major restructuring coincided with the emergence of the generative AI boom that has since reshaped technology industry priorities.
AI Investment Context
The timing of Verily's strategic shift aligns with the broader generative AI revolution that began gaining momentum in early 2023. ChatGPT became the fastest-growing consumer software application in history during this period, attracting over 100 million users within two months and catalyzing widespread industry focus on AI development.
This rapid adoption of generative AI technology has driven significant changes in how major technology companies allocate resources and define strategic priorities. For Alphabet, this has meant redirecting investments away from certain hardware initiatives toward AI and data infrastructure projects that align with the company's core competencies and market opportunities.
The closure of Verily's medical device program signals a fundamental shift in how Alphabet approaches healthcare innovation, moving from hardware-based solutions toward AI-powered platforms and data-driven healthcare applications.
