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Nest CEO steps down as division is brought under the Google Home team

Nest CEO steps down as division is brought under the Google Home team

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Nest Cam IQ
Photo by Vjeran Pavic / The Verge

Nest CEO Marwan Fawaz is stepping down as the smart home gadget maker is reshuffled yet again, now operating under the Google division responsible for the company’s Home smart speakers, according to a report from CNET. Just five months ago, Fawaz oversaw Nest’s reintegration under Google; for the last three years prior to that, Nest operated as an independent entity under Google parent company Alphabet.

The decision to bring Nest back under the Google umbrella was designed to help hardware chief Rick Osterloh better integrate Nest products with Google’s own hardware and software, much of it increasingly driven by artificial intelligence advances. Now, Fawaz is taking on an advisory role, and Nest will be overseen by Rishi Chandra, the vice president of product management for Google’s home and living room products. CNET reports that many inside the company felt that Fawaz was not an adequate leader of Nest and more of an operations manager, and the change is reportedly a welcome one.

“Marwan led the integration planning efforts and was responsible for determining our organizational strategy, in consultation with me, Rishi and our employees,” Osterloh told CNET in a statement. “We decided together to make these changes so we can better serve our users.”

In a separate statement given to The Verge, Osterloh downplayed criticisms of Fawaz’s performance and refuted the notion that his departure as CEO was related to his standing with employees:

We are accelerating the merger of our Home and Nest teams to provide our users and businesses with even better services under the leadership of Rishi Chandra. Marwan Fawaz is a strong CEO with a track record of operational excellence who led the integration planning efforts and was responsible for determining our organizational strategy. Marwan has done a remarkable job driving revenue growth, improving product quality, expanding the product portfolio and user satisfaction at Nest. Nest’s employee retention and satisfaction have significantly improved over his time with the team. Unsourced comments suggesting otherwise are wrong. I am pleased to report that he will stay with us as an executive advisor for our hardware business, for Alphabet companies, and future strategic investments.

Google has no plans to retire the Nest brand, and it sounds like Nest’s thermostats, cameras, and home security products will continue their development cycles separate from Google’s Home smart speakers, Pixel smartphones, and Chromecast streaming devices. Still, now that Nest is under Chandra, we may see even deeper integrations between Nest and Google software, like when Google Assistant was added to the Nest Cam IQ earlier this year.

Nest has struggled to find its place within Google since the Alphabet restructuring

Nest has had a shaky four years since it was acquired by Google in January of 2014. The unprecedented Alphabet restructuring in the summer of 2015 deprived it of key Google resources, according to CNET, and the company was asked to meet more rigorous milestones and develop products faster. Nest co-founder and CEO Tony Fadell left a year later, but not before Dropcam founder Greg Duffy, who had left the company in late 2015, said it was a “mistake” selling his smart camera startup to the Google-owned Nest. (Duffy reportedly hated working for Fadell and now works for Apple where, ironically, Fadell led the original iPod team.) Earlier this year, Nest co-founder Matt Rogers, its active chief product officer, also left the company.

Amid all that, CNET reports that Alphabet even considered selling Nest in 2016 to none other than Amazon, with talks described as “serious discussions” in an effort known internally as Project Amalfi. Though Fadell reportedly scuttled the deal by threatening to leave, which he would go on to do later that year regardless, it seems like Alphabet leadership has struggled to help Nest grow and find its place within its complex corporate structure.

Now, with Nest under Google’s home and living room product division, it may have finally found stable footing to continue developing its products. This time, it sounds like the company will have continued access to Google resources with the added benefit of having even more direct access to Google’s AI software.

Update July 18, 11:37PM ET: Added second statement from Google’s Rick Osterloh.