Updated Challenged by questions about Google’s cost-cutting at an internal meeting, Alphabet billionaire CEO Sundar Pichai reportedly reassured employees about the internet giant’s financial belt tightening by insisting that workplace fun doesn’t have to be about money.
CNBC obtained an audio recording of a Google town-hall staff meeting, held in New York, and reports that workers asked why the mega-corporation was “nickel-and-diming employees” by cutting travel budgets and perks in the wake of record profits. last year.
Pichai responded that it’s important for the web ad titan to pull together during tough times and subsequently addressed cost cuts by proposing that work can be enjoyable without being tied to rewards.
“Fun didn’t always — we shouldn’t always equate fun with money,” he said, according to the tape. “I think you can walk into a hard-working startup and people may be having fun and it shouldn’t always equate to money.”
Employees also asked about executive compensation, which Pichai reportedly did not answer. Pichai, estimated to be worth over $1 billion, received $6.3 million in compensation last year
Googlers were also told by the company’s finance head Kristin Reinke to be restrained with holiday parties, “to keep them small, keep them informal — try not to go over the top.”
Google, noted in the past for lavish parties, did not immediately respond to a request to confirm CNBC’s account of its meeting.
In July, Google launched an initiative to reduce waste and get better results from its 174,000 person workforce. The following month, at the Code Conference in Los Angeles, Pichai explained that he hoped the initiative would make the company 20 percent more productive.
Coincidentally, that’s about how much Alphabet’s headcount ballooned (21 percent) between Q2 2022 and a year earlier during the pandemic. During the company’s Q2 2022 earnings call [PDF] in July – its second consecutive quarterly earnings miss – Alphabet CFO Ruth Porat attributed the 24 percent increase in operating expenses to the increase in R&D expenses, “which was driven primarily by headcount growth.”
Rival Meta has also been sounding off about employee productivity while reducing hiring plans. In late June, Reuters reported that CEO Mark Zuckerberg wanted underperforming staff ousted.
While both Google and Meta have acknowledged that hiring has slowed, they’re also quietly conducting small layoffs.
The current economic slowdown has hurt Alphabet, which has seen its stock decline about 29 percent over the past six months. Meta has also suffered, with its stock down about 34 percent over the past six months and over 50 percent in the last year. ®
Updated to add
Post-publication Google responded, but did not specifically address our question about the accuracy of the CNBC report.
Instead, a spokesperson said, “At TGIF this week, most time was spent celebrating our New York office and employees, where we invested significantly and became an important and proud part of the local community.
“In addition, Sundar has been speaking to the company consistently over the last few months about ways we can be more focused. On Tuesday, he reinforced what we’ve discussed as a company previously: That we’re in a moment of uncertainty. [And] that our leaders are working to be responsible and efficient in all that their teams do – whether it’s being responsible around travel or events, or ensuring that our people are working on the highest impact/highest priority work.”