Google CEO Sundar Pichai, speaking at the Code Conference last week, suggested the tech company needed to become 20% more efficient — a comment some in the industry took to mean headcount reductions could soon be on the table. Now, it seems that prediction may be coming true. TechCrunch has learned and Google confirmed the company is slashing projects at its in-house R&D division known as Area 120.

The company on Tuesday informed staff of a “reduction in force” which will see the incubator halved in size, as half the teams working on new product innovations heard their projects were being canceled. Previously, there were 14 projects housed in Area 120, and this has been cut down to just seven. Employees whose projects will not continue were told they’ll need to find a new job within Google by the end of January 2023, or they’ll be terminated. It’s not clear that everyone will be able to do so.

According to Area 120 lead Elias Roman, the division aims to sharpen its focus to only AI-first projects, as opposed to its earlier mandate to fuel product incubation across all of Google.

TechCrunch learned of the changes from a source with knowledge of the matter. Google confirmed the changes in a statement.

“Area 120 is an in-house incubator for experimental new products. The group regularly starts and stops projects with an eye toward pursuing the most promising opportunities,” a Google spokesperson said. “We’ve recently shared that Area 120 will be shifting its focus to projects that build on Google’s deep investment in AI and have the potential to solve important user problems. As a result, Area 120 is winding down several projects to make way for new work. Impacted team members will receive dedicated support as they explore new projects and opportunities at Google.”

Over the years, the division has launched a number of successful products, including the HTML5 gaming platform GameSnacks, now integrated with Google Chrome; an AirTable rival called Tables which exited to Google Cloud; an A.I.-powered conversational ads platform AdLingo, which also exited to Cloud; video platforms Tangi and Shoploop, which exited to Google Search and Shopping, respectively; the web-based travel app Touring Bird, which exited to Commerce; and a technical interview platform Byteboard, a rare external spinout.

One of the projects now being cut with the changes is Qaya, a service offering web storefronts for digital creators, launched late last year. Similar to “link in bio” solutions available today like Linktree or Beacons, Qaya additionally integrated with Google Search and Google Shopping. It could also be linked with a YouTube Merch Shelf, to promote the creator’s products and services.

The other six projects being canceled weren’t yet launched, but included a financial accounting project for Google Sheets, another shopping-related product, analytics for AR/VR, and, unfortunately, three climate-related projects. These latter projects had focused on EV car charging maps with routing, carbon accounting for I.T., and carbon measurement of forests.

The changes follow last year’s reorg of the Area 120 team, which saw the group moved into a new “Google Labs” division led by veteran Googler Clay Bavor. The incubator was then grouped alongside other forward-looking efforts at Google, like its virtual and augmented reality developments and its cutting-edge holographic videoconferencing project known as Project Starline. We understand Google Labs and Starline are not impacted for the time being.

Google reorg moves AR, VR, Starline and Area 120 into new ‘Labs’ team

Pichai announced in July that Google would slow its hiring and sharpen its focus, but the company had said larger layoffs were not planned — it would still hire in engineering, technical and other critical roles. However, as part of its renewed emphasis on productivity, the company acknowledges it may need to restructure teams, deprecate products or even, at times, eliminate roles.

As for the Area 120 team members whose projects have now been discontinued, Google’s recruiters will work to help them find new roles, though placement is not a given in situations like these.

Google has north of 170,000 full-time employees. Area 120 had over 170 employees at the beginning of the year but is now under 100.

Editor’s Note: The article was updated moments after publication with Google’s comment. 

Google cancels half the projects at its internal R&D group Area 120 by Sarah Perez originally published on TechCrunch