There seems to be cost-cutting underway at Alphabet-owned hardware subsidiary Nest Labs as it reportedly pushes a team of software developers back into Google, according to Fortune’s Dan Primack and Leena Rao.
The Nest “platform” team, which works on the division’s “Internet of Things” ecosystem, will join Google under Android chief Hiroshi Lockheimer, who also heads up Google’s Amazon-Echo competitor, Home.
Fortune describes the move as a part of Alphabet’s efforts to cut costs at Nest. It’s also the latest development in a tumultuous period for Nest, in which the Alphabet company has replaced its CEO and faced concerns that the business was not living up to expectations.
All of Alphabet’s subsidiaries have strict budgets to adhere to (former Nest CEO Tony Fadell said in an interview earlier this year that “the fiscal discipline area has now descended upon everything) . As of earlier this year, Nest had delivered revenues that were “below the initial expectations Google had set” for it when it bought the company in 2014, according to Recode. Fadell stepped down as CEO in June, replaced by a former Motorola exec, Marwan Fawaz.
By combining Nest’s platform team into Google, the company will also be able to better focus its internet of things efforts.
Nest wasn’t immediately available for comment.
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