Alphabet, Google’s parent company, plans to reduce the staff for Google Fiber in half – from 1,000 to about 500 – amid rising costs and slower-than-expected subscriber growth, according to The Information (subscription required).
Google Fiber has not released subscriber figures, but the report said the division has about 200,000, putting it well below the pace required to reach a projected target of 5 million within five years. Google Fiber launched broadband and TV service in its first market, Kansas City, in July 2012.
Google Fiber ended 2015 with just north of 53,000 video subs, per MoffettNathanson’s analysis of data from the U.S. Copyright Office. Those numbers don’t factor in Google Fiber’s broadband sub numbers, which should be higher considering that the service provider tends to lead with its $70 1-Gig broadband offering.
Google has been asked for comment on the report.
Update: Google declined to comment on the report. Light Reading, citing a person with knowledge of the situation, said Thursday that the report of drastic cutbacks at Google Fiber are false.
The report from The Information does come about as Google Fiber explores the use of wireless-based high-speed Internet technologies, which could reduce expenses while speeding the acceleration of deployment. Google’s interest in wireless was seemingly amplified when it acquired Webpass, a company that specializes in wireless broadband delivery in markets such as San Francisco, Oakland, San Diego, Miami, Chicago and Boston.
Though Google Fiber has reportedly put some expansion plans on hold in Portland and San Jose as it weighs wireless alternatives, it did launch service sign-ups in portions of Salt Lake City this week.
Google Fiber has also launched service in parts of Austin, Texas; Nashville, Tenn.; Atlanta; Kansas City; and Provo, Utah, with commitments to deploy in San Antonio; and Charlotte and Raleigh-Durham, N.C. It’s been mulling expansions in Los Angeles; Chicago; Dallas; Portland, Ore.; San Jose, Irvine and San Diego, Calif.; Phoenix; Oklahoma City; Louisville, Ky.; and Jacksonville and Tampa, Fla. Google Fiber also has plans to offer service on a network being built by Huntsville Utilities.
“Other Bets,” the unit of Alphabet that includes Google Fiber and other longer-term “moonshot” projects, generated Q2 revenues of $185 million, up from $74 million a year ago, while operating losses widened to $709 million, from $555 million.