Although Google is moving to San Jose Village, the technology company will use the office space

The entrance next to the Water Company building in the Google Downtown West transit-oriented neighborhood in downtown San Jose, concept.

SAN JOSE — Google says its plan to downsize office space won’t derail the massive transit village the company plans to build in the heart of San Jose’s western suburbs.

The two efforts, both tied to Google’s real estate holdings, are fundamentally separate and have different goals and timelines, according to the tech titan. While cuts to office space in the Bay Area are expected, Google plans to break ground on the first phase of the Transit Village later this year, a company spokeswoman said.

During a conference call to discuss fourth-quarter financial results for Alphabet and its core business, Google, Chief Financial Officer Ruth Porat said the company plans to exit some of the space it currently leases.

One goal of right-sizing Google and Alphabet is to “optimize how and where we operate,” Porat told Wall Street analysts and investors during a call Thursday.

“In the first quarter of 2023, we expect to incur approximately $500 million in lease exit-related costs to align our office space with our adjusted global headcount outlook,” Porat said. We will continue to grow our real estate footprint.

It is not clear which leases the company intends to terminate. But as part of the real estate cuts, Google will essentially be moving out of its existing space, a company spokeswoman said.

In recent days, Google announced plans to cut 12,000 jobs worldwide. Google plans to cut an estimated 1,608 jobs in the Bay Area, including 1,436 in Mountain View, 119 in San Bruno and 53 in Palo Alto, according to a job reduction notice Google sent to state labor officials on Jan. 20.

Despite the company’s efforts to reduce the number of employees, reduce costs and reduce office utilization, the massive search effort in downtown San Jose continues.

Google has begun demolishing buildings in the formerly industrial part of the city to clear the way for the first phase of the new transit-oriented neighborhood, which includes office buildings, homes, shops, restaurants, hotel facilities, open spaces, cultural attractions and entertainment centers.

The search giant plans to hire up to 25,000 people at the Downtown West, officially known as the transit village near the Deridon train station and the SAP Center.

Before construction can even begin, Google will build the infrastructure for the first phase of the company’s new neighborhood, including water and sewer lines. Google is planning to build a green power plant that will be used for targeted development.

Large office building projects can easily take 24 to 27 months to complete – possibly more than two years – easily taking the completion time to early or mid-2026. Such a time frame is so distant that no analyst can accurately predict the conditions of the Bay Area economy or the technology sector at that time.

In recent days, Google has completely demolished the building at 140 South Montgomery St. that housed the industrial gases supplier for decades. Across the street at 145 South Montgomery St., demolition is underway for the old Sunlite Bakery Bread Depot building. A Google contractor has completely removed the back half.

Google aims to save the old bakery building’s Art Moderne-style entrance and permanently relocate it in the Transit Village project. The former half of the bakery has been partitioned from the inside by walls and the roof has already been removed.

The shuttered Patty’s Hotel, a longtime watering hole at 102 South Montgomery St., is expected to be completely bulldozed.