Google employees question CEO Sundar Pichai over layoffs despite better-than-expected earnings

Sundar Pichai-led company, Google, is getting close to becoming a 2 trillion company. However, there is a ‘significant decline in morale’ because of cost-cutting and lack of pay raises across the company. All this despite better-than-expected quarterly earnings.  According to a report by CNBC, at an all-hands meeting, the employees grilled their CEO and CFO Ruth Porat over their concerns.

“We have noticed a significant decline in morale, increased distrust and a disconnect between leadership and the workforce”, one employee commented. Another asked, “How does leadership plan to address these concerns and regain the trust, morale and cohesion foundational to our company’s success?”

One employee, during the meeting asked, “Despite the company’s stellar performance and record earnings, many Googlers have not received meaningful compensation increases. When will employee compensation fairly reflect the company’s success and is there a conscious decision to keep wages lower due to a cooling employment market?” To this Pichai stated that “leadership has a lot of responsibility here”. He added that “it is an iterative process”.

Talking about decline in morale, he noted, “We hired a lot of employees and from there, we have had course correction.”

Alphabet’s leadership has made several changes for the employees in the past couple of years. The management made it mandatory for employees to come back to office post pandemic. The company fired over 12,000 employees in last year alone. Google had also cut down on employee perks like free massages, closure of campus shuttle buses, fitness centres and more. It even scaled back on food items, limited employee travel to “business critical” trips. 

Google had recently sacked over 200 employees across its Python, Fluttr and Dart teams. CNBC had also reported that at least 50 of the positions were eliminated from the engineering department in offices across Sunnyvale, California.

At the meeting, one question read, “Given the recent headcount and positive earnings, what is the company’s headcount strategy?” while one asked, “Given the strong results, are we done with cost-cutting?”

To this, Pichai clarified that the company is “working through a long period of transition as a company” which includes cutting expenses and “driving efficiencies.” Regarding the latter point, he said, “We want to do this forever.”

To answer the second part of the question, Pichai stated, “To be clear, we’re growing our expenses as a company this year, but we’re moderating our pace of growth. We see opportunities where we can re-allocate people and get things done.”

Google will continue to be “very, very disciplined about managing headcount growth throughout the year.  Pichai said, “There’s a lot of demand to do new things and, in the past, we would have just done it reflexively by growing headcount. We can’t do it now through the transition we are in.”

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