Alphabet, Google’s mother or father firm, has settled right into a interval of stalled progress as financial uncertainty reverberates throughout Silicon Valley. Gone are the pandemic growth instances, when the web big’s revenue and worker head rely soared.

On Thursday, the firm posted its fourth consecutive decline in revenue because it grapples with a slowdown in digital promoting. Internet revenue plummeted 34 p.c to $13.6 billion, falling wanting Wall Avenue expectations of $15.3 billion, in line with information compiled by FactSet.

The web big additionally generated $76 billion in gross sales within the final three months of 2022, down 1 p.c from a 12 months earlier and in keeping with analysts’ estimates.

Google skilled years of hovering progress as shoppers spent extra money and time on-line in the course of the coronavirus pandemic, lifting the promoting market upon which the corporate relies upon. These benefits started waning final 12 months, when rising rates of interest and inflation prompted advertisers to rein of their spending.

“We’re on an essential journey to re-engineer our price construction in a sturdy method and to construct financially sustainable, vibrant, rising companies throughout Alphabet,” Sundar Pichai, the corporate’s chief government, mentioned in a press release.

In an earnings name, Mr. Pichai mentioned the corporate was endeavor numerous efforts to tame bills, together with by enhancing the monetary efficiency of its lineup of Pixel telephones and different devices, making an attempt to make its loss-making cloud division worthwhile and strengthening the enterprise at its video platform YouTube.

Alphabet shares fell 3 p.c in after-hours buying and selling.

One in every of its most notable latest strikes to chop prices has centered on its work drive. After hiring 30,000 staff within the first 9 months of final 12 months, Alphabet mentioned final month that it could minimize 12,000 staff, or 6 p.c of staff. The corporate mentioned on Thursday that it expects to incur $1.9 billion to $2.3 billion in worker severance and associated prices, most of which might be acknowledged within the present quarter.

Alphabet additionally expects to spend $500 million shedding pointless actual property this quarter, as a part of the hassle to pare again bills. It mentioned it could additionally higher handle spending on suppliers and deploy extra synthetic intelligence to automate some duties and enhance productiveness.

Alphabet mentioned it now has 190,234 staff, up from 186,779 in October. Employees in america who had been affected by the corporate’s layoffs will formally stay staff till March, and the departure course of might take longer for staff primarily based in different international locations.

The promoting pullback has coincided with different unwelcome developments for Alphabet. ChatGPT, a synthetic intelligence chatbot constructed by OpenAI, debuted to nice fanfare in November, prompting hypothesis that it might disrupt Google’s search engine dominance. Mr. Pichai declared a “code purple” in response, reassigning groups to provide precedence to A.I. initiatives.

Mr. Pichai mentioned that within the coming months Google would let customers entry a model of its search engine that comes with chatbot options, which was reported earlier by The New York Instances. He mentioned the corporate would additionally incorporate extra A.I. into purposes equivalent to Gmail and Docs, and its cloud unit would promote the underlying expertise to different companies.

Income from Google’s search engine, its largest enterprise, dropped greater than 1 p.c to $42.6 billion within the fourth quarter, decrease than analysts’ estimates of $43.3 billion.

Google has just lately needed to defend itself from the federal government. The Justice Division final month sued the corporate for the second time in three years, claiming most just lately that Google had abused its place as an promoting expertise monopoly. The Justice Division desires to drive Google to divest elements of its suite of advert expertise merchandise, which embody software program for getting and promoting adverts, a market to finish the transactions and a service for showcasing the adverts throughout the web.

That division generated $8.5 billion in the latest quarter, down 9 p.c from a 12 months earlier. Analysts had anticipated gross sales of $8.8 billion.

Promoting gross sales at YouTube dipped practically 8 p.c to $7.96 billion, beneath the $8.2 billion anticipated by analysts. In October, the corporate reported falling gross sales at YouTube, signaling that it has been extra weak to digital promoting swings than Google.

Gross sales at Google Cloud, the division that provides software program and expertise companies to different companies, elevated 32 p.c to $7.3 billion. Analysts had estimated $7.4 billion. Google has invested billions over time to assist the unit increase, however it has continued to lose cash. It recorded a lack of $480 million within the fourth quarter.