Alphabet life sciences company Verily is shutting its Shanghai office in an exit from China, according to sources familiar with the plan. A company spokeswoman confirmed the office closure to Business Insider.
Employees in the Shanghai office were informed of the plans earlier today. A spokeswoman refused to say how many employees were affected, but said the number was fewer than 100. One source estimated there to be around 70 full-time employees in the Shanghai location.
The spokeswoman told Business Insider that Verily will centralize its Asia-Pacific presence in its Singapore office, and will help employees in Shanghai find other roles within the company.
The exact reasons for the shutdown are murky. The Google sister company has been quietly building a China presence for the last couple of years in the hope of forging key deals for Project Baseline, its study to "map" human health by recruiting volunteers for a variety of clinical trials. Verily's spokeswoman said the Shanghai office was an "early pilot," but insiders have indicated that the program was more developed than that.
Some job listings for roles in Verily's Shanghai office, which were still live at the time of publishing, reference these deals as well as plans to grow the company's China presence. "Verily Shanghai has developed local partnerships in China to continue development of the Baseline offering," reads one ad for an engineering director, which can be found on the company's website. Other ads also mention the "Baseline for China market."
But according to sources familiar with the company's strategy, Verily struggled to make the necessary inroads on these deals, which included plans for a significant joint venture between Verily and Shanghai-based medical device company WuXi falling apart, one source said.
A Verily spokeswoman refused to comment on specific deals. She said the company intends to move some of the work being done in China to its US offices. "We're working on building baseline into a global platform," she said when Business Insider asked about plans for any future work in China, but refused to elaborate beyond that.
Google has had a complicated relationship with China. It pulled its search engine out of the country in 2010, citing China's censorship practices, though it continues to maintain a limited presence for some areas of its business.
But Alphabet's other divisions operate largely independent from the Google mothership, and are helping the company find other routes into the country. Alphabet's self-driving unit Waymo also set up a subsidiary in Shanghai in 2018, Reuters reported that the time.
As for Verily, its ambitions for China first became apparent in 2017 when Singapore-based investment arm Temasek put $800 million into the life sciences company. Twenty-three percent of Temasek's portfolio was in China at the time, as Bloomberg reported, hinting at a possible move into the country for Verily.
Originally named Google Life Sciences and spun out under Alphabet in 2015, Verily Life Sciences has a range of ongoing projects in healthcare, but Baseline is its biggest and best known.
In March, Verily launched a COVID-19 triaging service and testing sites across the US, while also establishing a lab to process the results.
In August, it announced it would enter the insurance market by launching a subsidiary named the Coefficient Insurance Company.