Appen, an Australian data services company with a significant partnership with Google, providing a substantial workforce for its third-party search quality raters, received an unexpected notice from Google. According to the notice, Google has decided to terminate its contract with Appen on March 19, 2024.
This abrupt termination has caught Appen off guard, as they had not received any prior notice or indication of Google’s decision. The consequences of this cancellation are substantial, with Appen estimating a staggering loss of $82.8 million in revenue, bearing a gross margin of 26% for the company.
Google’s quality raters play a vital role in evaluating the quality of Google’s search results. It’s important to clarify that these raters do not directly influence or manipulate the search results themselves. In other words, they do not possess the authority to either demote or elevate specific websites within Google Search rankings.
According to Google,
Search quality rater guidelines are used by our search raters to help evaluate the performance of our various search ranking systems, and their ratings don’t directly influence ranking. The guidelines share important considerations for what content is helpful for people when using Google Search.
Appen stands out as one of the selected partners Google engages with to contract these quality raters. Given the substantial revenue figure of nearly $83 million, it is reasonable to infer that Google has engaged Appen to onboard a substantial number of raters.
To provide context, Google has stated that it employs approximately 16,000 search quality raters in total. As such, the raters contracted through Appen constitute a noteworthy portion of this broader workforce responsible for assessing search quality.
It is hard to say whether Google is replacing its human quality raters with AI tools, but given how the company has recently laid off hundreds in its Ads team in favor of AI, it is not hard to imagine.
11th Layoff Announcement in a Year, 4th in January 2024
More recently, the company has also laid off dozens from its X Labs, marking the search engine giant’s 11th layoff announcement within a year and the fourth one this month.
X Labs is the company’s experimental products wing that works on concepts rather than commercial items. It burns around a billion dollars each quarter and makes no profit, making it a prime candidate for job cuts.
The internal company memo announcing the layoffs shares more news than just the firings:
We’re expanding our approach to focus on spinning out more projects as independent companies funded through market-based capital. We’ll do this by opening our scope to collaborate with a broader base of industry and financial partners, and by continuing to emphasize lean teams and capital efficiency.
In essence, Google intends to encourage these financially unsustainable ventures to secure alternative funding sources, albeit to some extent.
