Alphabet details charges it's taking for workforce cuts, accounting shifts
Drew Angerer
Google parent Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) got a jump on next week's first-quarter earnings by detailing some key figures including those tied to workforce reductions and office cuts.
In an SEC filing, the company reinforced its earlier notice that it expects to take charges of $1.9B-$2.3B tied to employee severance and related costs, "the majority of which will be recognized in the first quarter of 2023." And the reported number of employees at Q1's end will include almost all affected by the workforce reduction announcement from January.
It's also taking $0.5B in charges tied to office-space reductions.
A reassessment of the useful lives of server and network equipment is leading to a reduction in depreciation expense of about $3.4B for fiscal 2023, the company said. It added that the newly formed Google DeepMind will be reported in the company's unallocated corporate costs beginning in Q2.
Also beginning with the first quarter, Alphabet says it simplified cost-allocation methodologies, shifting some corporate costs within segments. And it's shifted the timing of annual employee stock awards to March from January, which will result in less related expense recognized in the first quarter.
With its Q1 results, it will recast prior results to reflect the new segment for DeepMind as well as the cost allocation changes.
Alphabet reports its earnings after the closing bell next Tuesday, April 25; Consensus expectations are for earnings per share of $1.07 on revenues of $68.8B.