Waymo Expands as Alphabet Burns Cash; Microsoft Reshapes Work

Alphabet’s Other Bets segment lost $2.05 billion in the third quarter as the company pushed Waymo toward a German launch and poured money into AI. The segment, which includes Waymo, brought in $372 million in revenue, just 0.3% of Alphabet’s total sales. Its operating loss widened from $1.43 billion a year earlier. The expansion plan belongs to corporate executives; at Microsoft, another AI push is already changing where employees work and how many managers they have.

Expansion on the company’s terms

Waymo plans to launch robotaxi rides in Germany in 2027, its third international market and first in the European Union. CEO Sundar Pichai said Waymo operates in 15 major U.S. cities and had recently opened public service in San Antonio, San Diego and Tampa. The company also plans to expand into Canada, Singapore and Spain.

Last week, Waymo began offering driverless rides to and from the Las Vegas airport. It had announced airport service in five other cities, including San Francisco and Phoenix. “Waymo is on a great trajectory,” Pichai said Wednesday. “We have now driven more than 300 million fully autonomous miles.” The numbers measure the company’s reach; the article reports no community-led decision-making around the expansion.

Waymo has a commanding lead in the U.S. robotaxi market, where Amazon’s Zoox and Tesla are emerging competitors. China-based Baidu’s Apollo Go is its steepest competition globally. Tesla says vehicles in its Robotaxi network have completed about 3.8 million miles “unsupervised,” or without a human driver at the wheel. CEO Elon Musk said last week that Robotaxi should become a “meaningful” revenue contributor by the second half of 2027.

Alphabet once operated Waymo as a side project while its online advertising business generated tens of billions of dollars in annual profit and cash. Now its free cash flow has turned negative, drawing concern from Wall Street. Alphabet missed earnings and revenue estimates Wednesday, and its stock fell almost 10% in extended trading. It kept its full-year capital expenditure forecast at $195 billion to $205 billion, largely for AI infrastructure, and reported more than $9 billion in negative free cash flow for the quarter.

AI reorganization reaches workers

Waymo announced earlier this month that it had closed a $5 billion term loan, its first debt financing. In February, the robotaxi business announced a $16 billion funding round led by Alphabet that valued it at $126 billion. Andreessen Horowitz, Fidelity, T. Rowe Price, Sequoia Capital, Kleiner Perkins and others took part.

At Microsoft, Charles Lamanna is reorganizing teams and tightening office expectations as CEO Satya Nadella reshapes the company around AI. Lamanna, head of the Copilot platform and AI agents and now Office, wrote in August: “The most important thing my team will do this year won’t be any single product or feature we ship: instead, it will be changing how we work.” He has required senior staff to work in offices four days a week and offered some employees relocation to major hubs.

Lamanna now controls Office productivity software and Teams workplace chat, used by millions of workers. He took over those groups earlier in October after Ryan Roslansky announced plans to leave at the end of the year. Roslansky and Lamanna were two of three executives on the new Copilot leadership team. Rajesh Jha retired in July.

Flatter teams, tighter control

Teams increased the engineering managers’ “span of control,” or the number of employees reporting to each manager, according to two people familiar with the changes. Some managers became individual contributors. One person said the rationale was that agentic coding capabilities mean Microsoft needs fewer managers; the team will have one manager per 12 individual contributors. Three people familiar with plans said select U.S. employees could relocate to offices in Redmond, Washington, San Francisco or New York. The sources asked not to be identified.

Lamanna also asked employees at the “partner” level and above, some of Microsoft’s most senior staff, to work in physical offices at least four days a week. The companywide standard is three days. A Microsoft spokesperson said, “We’re rethinking where managerial layers are critical and where flatter structures can enable faster decision-making, clearer ownership and greater autonomy.”

The spokesperson said AI coding tools mean engineers increasingly design and direct an “agentic coding machine,” while some managerial coordination becomes less central. “At the same time, some tasks that traditionally required managerial coordination, such as managing handoffs and orchestrating work across teams, become less central,” the spokesperson said. The company says it is flattening structures; employees face the office rules and organizational changes set by the people above them.