Google Fiber Pauses Expansion Plans, Laying Off Some Staff

Craig Barratt, CEO of Google Access, is stepping down; operations in launched Google Fiber markets to continue (Updated)
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Google Fiber has hit the pause button in a batch of “potential” rollout cities as the division looks to “refine” its deployment and technology approaches.

“In terms of our existing footprint, in the cities where we’ve launched or are under construction, our work will continue,” Craig Barratt, SVP of Google parent company Alphabet and CEO of the company’s Access unit, announced Tuesday in this blog post titled Advancing our amazing bet “For most of our “potential Fiber cities” — those where we’ve been in exploratory discussions — we’re going to pause our operations and offices while we refine our approaches.”

Barratt’s role is also changing, also announcing in the post that “I’ve decided this is the right juncture to step aside from my CEO role. Larry [Page] has asked me to continue as an advisor, so I’ll still be around.”

The pause comes as Google looks to alter the focus on its business and product strategy, as well as its technology and deployment methods, with a great emphasis on less expensive wireless broadband options.

The shift follows Google Fiber’s recent acquisition of Webpass, a point-to-point wireless broadband service provider that serves portions of San Francisco, Oakland, San Diego, Miami, Chicago and Boston. Google has also asked the FCC for permission to move ahead with plans to trial wireless broadband in as many as 24 U.S. locations, including New York City, Chicago and Atlanta.

RELATED: Google Touts Potential for Wireless Broadband

“In this handful of cities that are still in an exploratory stage, and in certain related areas of our supporting operations, we’ll be reducing our employee base,” Barratt added but didn’t reveal a figure.

Ars Technica reported that the Alphabet Access division that operates Google Fiber is laying off about 9% of its staff. Google Fiber has been asked for comment.

In August, The Information reported that Alphabet was making plans to cut Google Fiber’s staff in half – from 1,000 to about 500 – but a follow-up report by Light Reading said reports of a cutback of that magnitude were false.

REPORT: Alphabet to Cut Google Fiber Staff In Half: Report

Update: Google did not confirm the details of the layoff but did provide this comment from Page:  “I'm excited about the potential of providing super fast internet to more people. Craig has worked hard to scale this business, and I look forward to continue working with him in his new role as an Advisor.”

On the wireline side, Google Fiber has deployments of 1-Gig broadband and pay TV services underway in Kansas City (Missouri and Kansas); Atlanta, Ga.; Austin, Texas; Charlotte, N.C.; Nashville, Tenn.; Provo and Salt Lake City, Utah; and, most recently, in The Triangle region of  North Carolina.

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Google Fiber  has been exploring 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.

MoffetNathanson analyst Craig Moffett, citing data from the U.S. Copyright Office, said in a recent report that Google Fiber ended Q2 2016 with 68,715 video subscribers, up 66.6% year-over-year, along with an estimate that Google Fiber had about 453,000 broadband customers by the end of June 2016.

Google Fiber doesn’t break out its individual revenues, but it is part of “Other Bets,” the unit of Alphabet that includes Google Fiber and other longer-term “moonshot”  projects. Other bets ,generated Q2 revenues of $185 million, up from $74 million a year ago, while operating losses widened to $709 million, from $555 million.

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