More struggles at Google's parent company as Alphabet scales back its drone plans

Google's parent company Alphabet is being forced to scale back its drone delivery program, Project Wing.

According to a report by Bloomberg's Mark Bergen, some Project Wing staffers are being laid off or reassigned within Alphabet. The company also canceled a plan to deliver Starbucks coffee via drone, a pilot program similar to the one a few months ago with Chipotle.

The news comes following the departure of David Vos, the former leader of Project Wing. It's also the latest sign that Alphabet is getting tougher with its "other bets" as it struggles to find the next source of growth outside of its core ad business at Google.

Project Wing is part of X, the experimental division of Alphabet that works on "moonshot" projects. The timing of the cutbacks news is also curious since Astro Teller, the head of X, gave an interview with The Verge where he talked a lot about the potential of Project Wing drones to change the way we buy and share goods.

"Project Wing has the potential to remove a big chunk of the friction in how physical things are moved around in the world," spokesperson from X told Business Insider in a statement. "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 system...While there's still a lot of work to be done, we believe that opening the skies to faster, more efficient transportation of goods is a moonshot worth pursuing."

That may not shed a lot of light on the situation, but it does play into a broader theme of recent shakeups within Alphabet's structure.

In the year since Google reorganized into Alphabet, several top executives have departed, including Tony Fadell, the CEO of smart home company Nest, and Bill Maris, the head of GV (formerly Google Ventures), a firm that invested in early stage startups. Alphabet also announced that it's ending expansion of its Google Fiber internet service to more cities.

It's unclear how large the Project Wing cutbacks will be, but it is another sign that Alphabet is becoming more strict about which projects it wants to continue. Alphabet's other bets make up just a tiny amount of the company's total revenue. In the third quarter of this year, revenues were just $197 million and operating losses were $865 million.

A spokesperson for X was not immediately available to comment.

If you work at an Alphabet company and have anything to share about how things are going, you can reach out to skovach@businessinsider.com.