Growth, cost cutting, and employee disagreements over cultural shifts put CEO Sundar Pichai on the defensive. At a company-wide town hall meeting this week, Pichai faced tough questions from employees over cuts to travel and entertainment budgets, productivity management, and potential layoffs, according to CNBC Audio.
Pichai was asked in a popular question by employees of Google’s internal Dory system about why the company is “nickel and gradation employees” by cutting travel and loot budgets at a time when in “Google has record profits and huge cash reserves,” as it emerged from the Covid pandemic.
“How can I tell? Pichai began his measured response. “Listen, I hope you all read the outside news. The fact that we’re acting a little more responsibly in one of the toughest macroeconomic conditions of the past decade means that I think it’s important that we pull together as a company to get through times like this.
The latest gathering of all hands comes as Google’s parent Alphabet, Meta, and other technology companies are facing a variety of economic challenges, including a potential recession, rising inflation, rising interest rates, and subdued advertising spending. Companies that have been known for strong growth and a plethora of fun perks for over a decade are now seeing the other side. The pace of rate hikes puts the economy and markets in a ‘danger zone’, says Peter Boockvar.
In July, Alphabet reported its second straight quarter of weaker-than-expected profits and revenue, and third-quarter revenue growth is expected to fall to single digits from more than 40% a year earlier. Pichai admitted that it’s not just the economy that has posed challenges for Google, but also a growing bureaucracy at Google. Despite this, he appeared exasperated at times in the meeting, reminding staff that “we can’t always choose macroeconomic conditions.”
After the company’s workforce skyrocketed during the pandemic, chief financial officer Ruth Porat said earlier this year that she expects some economic problems to persist for the foreseeable future. Google has canceled the next generation of its Pixelbook laptop and cut funding for its internal Area 120 incubator.
Google launched a campaign called Simplicity Sprint in July, aimed at soliciting ideas from its more than 174,000 employees on how to “get better results, faster” and “eliminate waste”. Earlier this month, Pichai said he hoped to make the company 20% more productive while slowing hiring and investment.
