Google is gutting its marketing divisions as part of a broader effort to curb expenses, according to internal memos seen by CNBC.
The search and ad giant is planning to cut marketing budgets by as much as half, according to the memos. The budget cuts will take effect in the second half of this year, and also include a hiring freeze for full-time and contract employees.
Google shares fell 1.9% in after-hours trading after closing at $1,271.17 on Thursday.
"We continue to have a robust marketing budget, particularly in digital, in many business areas,” a Google spokesperson told CNBC.
Last week, Google CEO Sundar Pichai told employees in a company-wide email that it is taking a number of measures to stem the impact of COVID-19 on the business.
Google is “recalibrating the focus and pace of our investments in areas like data centers and machines, and non business essential marketing and travel,” the email said.
Pichai's email also said that Google will "take a more critical look at the pace of hiring" for the rest of the year. Alphabet ended 2019 with about 119,000 employees, and had been planning to hire about 20,000 new employees in 2020.
Economic turmoil tied to the coronavirus pandemic have led to a drop in advertising demand, and Alphabet's ad-heavy business model is expected to take a hit this year.
In a recent note, Raymond James analyst Aaron Kessler slashed his stock price target for Alphabet by nearly 10% to $1,425, and cut his 2020 revenue estimates by 14%, citing weakness in the digital advertising sector.
Alphabet, which is Google's parent company, is expected to report its March quarter earnings in early May.
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