Earlier this month Google announced that Google Cloud had hit a $10bn annual revenue run rate, but the company on Friday admitted it is cutting its headcount in the enterprise unit as part of a restructure.
The restructuring effort will involve eliminating some roles, a Google spokesperson told CNBC on the back of a Wall Street Journal story that Google would cut "a small number of employees".
"We recently communicated organizational changes to a handful of teams that will improve how we market, partner, and engage with customers in every industry around the globe," a Google spokesperson said. "We made the difficult, but necessary decision to notify a small number of employees that their roles will be eliminated."
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Google Cloud, under its CEO Thomas Kurian – a former Oracle exec – is playing catch-up with its much larger rivals in cloud computing, Amazon Web Services and Microsoft Azure.
According to a CNBC source, the job cuts affect fewer than 50 Google Cloud employees while the restructuring effort is meant to give the organization more focus on non-US markets.
Google is reportedly working with internal 'mobility teams' to help affected employees find new roles at the company.
Google reported Google Cloud's Q4 2019 revenues hit $2.6bn, up from $1.7bn a year prior, and $8.9bn for the full year. AWS revenues for Q4 2019 were just under $10bn with a $40bn annual run rate, while Microsoft in January reported Q2 commercial cloud revenues of $12.5bn and a $50bn annual run rate.
Kurian last week told investors at a Goldman Sachs keynote that it was focusing on digital transformation solutions for retail, healthcare, financial services, media and entertainment, and industrial and manufacturing verticals.
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He highlighted Google's strengths in AI for each vertical, such as behavioral analytics for retail, compliance for financial services, and the genomic data model for healthcare providers.
Kurian's growth strategy revolves around expanding its total addressable market, deepening its presence with the largest companies in 21 markets across six verticals, and expanding its direct sales team globally to target C-level execs.
The cloud unit also wants to expand indirect distribution through partners, such as resellers, managed service providers, and independent software vendors.