According to Google, "In the USA, 94% of people with smartphones search for local information on their phones. Interestingly, 77% of mobile searches occur at home or at work, places where desktop computers are likely to be present."
Google figured that people no longer want to zoom in when reading website content on their mobile phones. Instead, they want to access information quick and easy. Therefore, as of early this week, website optimisation for mobile devices is no longer an option. If you wish your website to rank well on Google (when searched from mobile devices), your site has to be "mobile-friendly".
This update applies to individual pages, not your entire website. You can use Google Mobile-Friendly Test to check mobile-friendliness for individual page(s) on your site.
This new Google update is not affecting searches from desktops or tablets.