AI investment continues to increase and cost-control pressure rises: Alphabet Inc. Class C (GOOGL.US) expands the coverage of its employee voluntary exit buyout program

Alphabet Inc. Class C (GOOGL.US) is seeking to control rising costs in the face of massive spending in artificial intelligence (AI), and the company has expanded its employee buyout program to multiple countries this year. Alphabet Inc. Class C confirmed that in June this year, it began offering voluntary exit compensation packages to some employees in Canada, France, Germany, Japan and Switzerland. An Alphabet Inc. Class C spokesperson said in a statement: "In 2025, some of our teams introduced voluntary exit programs with severance compensation. This summer, in June, we expanded the program to a small number of countries globally to support our important work going forward." The move comes as Alphabet Inc. Class C's AI spending continues to climb. As large technology companies race to build data centers, procure advanced chips and expand AI computing capacity, related infrastructure investment is continuing to push up corporate capital expenditure and operating costs. Large-scale AI investment has made Wall Street uneasy and has also put pressure on Alphabet Inc. Class C's share price. Alphabet Inc. Class C's previously disclosed capital expenditure plan further highlights the scale of this investment. The company expects capital expenditure in 2026 to reach US$195 billion to US$205 billion, a sharp increase from 2025, and expects capital expenditure to increase further significantly in 2027. The company said the related investment is mainly for technical infrastructure, including servers, networking equipment and data centers. In terms of actual spending, Alphabet Inc. Class C's capital expenditure in the first nine months of 2026 had reached US$132 billion, compared with US$63.6 billion in the same period last year, more than doubling. At the same time, investment in infrastructure such as data centers will also bring subsequent depreciation expenses and operating costs such as energy, continuing to put pressure on the company's income statement. Alphabet Inc. Class C also disclosed that as of the end of September 2026, the total future lease payments under lease agreements it had signed but not yet begun to perform amounted to US$130.5 billion, with the related leases mainly involving data centers and energy infrastructure. It is worth noting that Alphabet Inc. Class C is not simply shrinking its workforce across the board through layoffs, but is trying to reallocate resources to priority development areas. According to reports, Alphabet Inc. Class C's total number of employees has continued to grow in recent quarters, but the company has been seeking to shift human resources to businesses with greater strategic priority. Chief Financial Officer Anat Ashkenazi has emphasized in multiple quarterly earnings presentations that AI and cloud computing remain the company's key hiring areas. Previous voluntary exit programs excluded employees in Google Cloud and the artificial intelligence research unit DeepMind, and the expanded program this time appears to have continued a similar arrangement. This means that Alphabet Inc. Class C's current personnel adjustment is closer to organizational optimization around its AI strategy: on the one hand, reducing the personnel and cost burden of some business units through voluntary exit plans; on the other hand, continuing to allocate funds and talent to AI research and development, cloud computing and related infrastructure. As AI technology gradually penetrates core businesses such as search, advertising, cloud services and enterprise software, the company needs to reassess the personnel needs, business priorities and resource use efficiency of different departments. It is worth mentioning that Microsoft Corporation (MSFT.US) also said last week that it would open a voluntary exit compensation program to about 60,000 employees in order to cut costs, reshape its workforce structure and adapt to the business layout of the AI era. The program covers more than a quarter of Microsoft Corporation's total global workforce, involving some employees in the United States, Canada, India and the United Kingdom, while some departments and positions are not covered. Microsoft Corporation's adjustment this time also comes against the backdrop of continuously expanding AI infrastructure investment. As investment in AI data center construction, chip procurement and model research and development continues to increase, technology giants are facing the challenge of how to control overall operating costs while maintaining technology investment. The successive launch of voluntary exit programs by Alphabet Inc. Class C and Microsoft Corporation also reflects that large technology companies are re-examining traditional staffing methods and trying to concentrate more resources on AI-related businesses. According to reports, Alphabet Inc. Class C's latest round of buyouts was launched on the basis of previous related programs. Since last year, Alphabet Inc. Class C has offered voluntary exit programs to employees in some departments in the United States and the United Kingdom. Executives have described the program as an option for employees who no longer identify with the company's pace of development or strategic direction. The report also noted that in at least one case, Alphabet Inc. Class C offered a voluntary exit package to a department and subsequently carried out a round of layoffs. In Switzerland, Alphabet Inc. Class C has about 5,000 employees and operates a large engineering research and development center in Zurich. People familiar with the matter said the program covered multiple departments but did not include DeepMind. After Alphabet Inc. Class C launched the voluntary exit compensation package in Switzerland, employees began leaving starting in August. People familiar with the matter said Alphabet Inc. Class C announced the relevant compensation package in mid-June and informed employees who submitted applications of the approval results by mid-July. Employees who accepted the package receive compensation equivalent to one month's salary for each full year of service, capped at 12 months' salary. One person familiar with the matter said that in a team of about 50 employees, at least 4 accepted the package. It is worth noting that Alphabet Inc. Class C had also previously carried out personnel adjustments in Switzerland. In 2023, the company cut more than 200 employees in Switzerland, which triggered employee protests and strike action at the time. The voluntary exit program covering multiple departments once again reflects the ongoing trend of Alphabet Inc. Class C adjusting staffing across different business teams globally. Overall, Alphabet Inc. Class C's expansion of its employee voluntary exit program this time does not mean the company is reducing investment in AI. On the contrary, with AI infrastructure capital expenditure continuing to grow, the company is trying to concentrate funds and human resources on strategic priority areas such as AI and cloud computing by adjusting its workforce structure and controlling costs in non-priority businesses. For investors, the focus going forward is not only whether Alphabet Inc. Class C can continue to expand AI infrastructure investment, but also whether these huge investments can revenue growth in search, advertising and cloud computing businesses, and whether rising depreciation, energy and personnel costs will put continued pressure on profit margins and free cash flow.