Some Google employees are concerned that they will be the next victims of industry-wide layoffs.
While Google has so far avoided the widespread job cuts that have afflicted other tech companies, particularly those bolstered by a slumping ad market, internal anxiety is rising, according to documents obtained by CNBC and employees who spoke on the condition of anonymity.
Alphabet executives have emphasized the importance of sharpening “focus,” lowering project costs, and making the company 20% more efficient. There has also been a recent shift in performance reviews, and some employees see declining travel budgets and less swag as indicators that something bigger is on the way.
Sundar Pichai, CEO of Alphabet, launched the “Simplicity Sprint” in July to boost efficiency during an uncertain economic environment. Just a few miles away, Meta announced this month that it is laying off 13% of its workforce, or more than 11,000 employees, due to declining ad revenue. Snap announced a 20% layoff in August, and Twitter recently laid off roughly half of its workforce under the leadership of new owner Elon Musk. In other Silicon Valley news, HP announced on Tuesday that it plans to lay off 4,000 to 6,000 employees over the next three years.
Google’s business hasn’t been as hard hit as many of its peers, but the combination of a potential recession, soaring inflation, and rising interest rates is clearly having an effect. Last month, the company reported that YouTube’s ad revenue fell from the previous year, as Google experienced its slowest period of growth since 2013, with the exception of one quarter during the pandemic. Google stated at the time that it would reduce headcount growth significantly in the fourth quarter.
The crypto market, which had a negative impact on Google’s latest results, has dropped even further with the collapse of crypto exchange FTX, raising concerns about industry contagion.
Google has already made some cuts around the periphery of the company.
The company canceled the next generation of its Pixelbook laptop, cut funding to its in-house incubator Area 120, and announced the closure of its digital gaming service Stadia.
Concerns about terminations are growing, at least in some areas. And some employees are using memes to express their anxieties in a humorous way.
CNBC received an internal meme depicting a before-and-after animated character. On the front, the figure raises his hands with the caption “inflation pay rise!” On the reverse side, a terrified character sits next to the caption, “don’t fire us, please.”
Another meme features the names of tech companies that have recently laid off employees — “Meta, Twitter, Amazon, Microsoft” — next to an image of a worried anime character.
There were also memes made in response to a statement issued last week by activist investor TCI Fund Management, which urged Pichai to reduce salaries and headcount through “aggressive action.”
Pichai found himself on the defensive among employees in September, as he was forced to explain the company’s shifting position after years of supercharged growth. Executives stated at the time that there would be small cuts, but layoffs were not ruled out.
A number of questions about the possibility of layoffs were highly rated by staffers on Google’s internal question-asking system, Dory, at a more recent all-hands meeting. There were also concerns about executives mismanaging headcount.
“It appears that we added 36k full-time role YoY, increasing headcount by about 24%,” one top-rated question read. “Many teams feel like they are losing headcount, not gaining it. Where did this headcount go? In hindsight, and given concerns around productivity, should we have hired so rapidly?”
Employees wanted more information following the company’s most recent earnings call and comments from CFO Ruth Porat about potential layoffs.
“Can we get some more clarity on how we’re approaching headcount for 2023?” one question asked. Do we have any idea how long we should budget for difficult headwinds? ”
Other questioners wondered if employees “should expect any direct consequence to our teams, direction, and/or compensation to the reduced profits we saw in the earnings call,” and how they would achieve 20% more productivity. Will refocusing be enough, or should we expect layoffs? ”
(Adapted from CNBC.com)