Google’s drone project is the latest Alphabet project to be target of financial restraint.The latest Google drones have just started taking flight in the real world. But the team behind the technology is slowing down, trimming headcount and shelving initiatives as the experimental unit becomes the latest target of tightening budgets across parent company Alphabet Inc.
Project Wing, a unit of Alphabet’s X research lab, nixed a partnership with coffee giant Starbucks Corp., according to people familiar with the decision. Following the departure of project leader Dave Vos in October, the unit also froze hiring and began asking some staff to seek jobs elsewhere in the company, according to some of those people. They asked not to be identified speaking about private company moves.
The decisions are part of a broader Alphabet effort to rein in spending and try to turn more experimental projects from loss-making risky bets into real businesses. Drones are in a particularly knotty place. U.S. federal regulation does not yet allow for delivery, except in select test zones. However, Alphabet’s deceleration comes as other technology companies, including Amazon.com Inc., plow money into drone delivery.
“Project Wing has the potential to remove a big chunk of the friction in how physical things are moved around in the world,” a spokeswoman for X wrote in an e-mail. “What we’re doing now is developing the next phase of our technology, and as always are thinking in a very broad way about all the potential use cases for delivery by unmanned aerial systems.”
In August, Project Wing won approval for test flights at a U.S. site, part of a White House effort to encourage unmanned vehicle delivery. Then in September, Alphabet announced a new foray: a partnership with Chipotle Mexican Grill Inc. to deliver food via drone at Virginia Tech.