Google CEO Pichai tells employees not to 'equate fun with money' in heated all-hands meeting

As Google tries to navigate an unfamiliar situation of slowing growth, outgo cutting and worker dissent implicit taste changes, CEO Sundar Pichai is uncovering himself connected the defensive.

At a companywide all-hands gathering this week, Pichai was faced with pugnacious questions from employees related to cuts to question and amusement budgets, managing productivity and imaginable layoffs, according to audio obtained by CNBC.

Pichai was asked, successful a question that was highly rated by staffers connected Google's interior Dory system, wherefore the institution is "nickel-and-diming employees" by slashing question and swag budgets astatine a clip erstwhile "Google has grounds profits and immense currency reserves," arsenic it did coming retired of the pandemic.

“How bash I accidental it?” Pichai began his measured response. “Look, I anticipation each of you are speechmaking the news, externally. The information that you know, we are being a spot much liable done 1 of the toughest macroeconomic conditions underway successful the past decade, I deliberation it’s important that arsenic a company, we propulsion unneurotic to get done moments similar this.”

The astir caller all-hands gathering comes arsenic Google genitor Alphabet, Meta and different tech companies are staring into a slew of economical challenges, including a imaginable recession, soaring inflation, rising involvement rates and tempered advertisement spending. Companies that, for the past decade-plus, person been known for precocious maturation and an abundance of amusive perks, are seeing what it's similar connected the different side.

In July, Alphabet reported its 2nd consecutive 4th of weaker-than-expected net and revenue, and third-quarter income maturation is expected to dip into the azygous digits, down from implicit 40% a twelvemonth earlier. Pichai admitted that it's not conscionable the system that's caused challenges astatine Google but besides an expanding bureaucracy astatine Google.

Still, helium astatine times sounded annoyed successful the meeting, and reminded staffers that, "We don’t get to take the macroeconomic conditions always.”

After the company's headcount ballooned during the pandemic, CFO Ruth Porat said earlier this twelvemonth that she expects immoderate economical issues to persist successful the adjacent term. Google has canceled the adjacent procreation of its Pixelbook laptop and cut funding to its Area 120 in-house incubator.

Google launched an effort successful July called "Simplicity Sprint," which aimed to solicit ideas from its much than 174,000 employees connected wherever to "get to amended results faster" and "eliminate waste." Earlier this month, Pichai said helium hoped to marque the institution 20% much productive portion slowing hiring and investments.

One of the top-rated questions posed by employees astatine this week's gathering asked Pichai to elaborate connected his commentary regarding improved productivity and the 20% goal.

“I deliberation you could beryllium a 20-person squad oregon a 100-person team, we are going to beryllium constrained successful our maturation successful a looking-ahead basis," Pichai said. "Maybe you were readying connected hiring six much radical but possibly you are going to person to bash with 4 and however are you going to marque that happen? The answers are going to beryllium antithetic with antithetic teams."

Pichai said enactment is combing done implicit 7,000 responses it's received from employees regarding suggestions from the Simplicity Sprint effort.

"Sometimes we person a merchandise motorboat process, which has probably, implicit galore years, grown much analyzable than possibly it needs to be," Pichai said. "Can we look astatine that process and possibly region 2 steps and that’ll beryllium an illustration of making thing 20% much efficient? I deliberation each of america chipping successful and doing that crossed each levels, I deliberation tin assistance the company. At our scale, determination is nary mode we tin lick that unless units of teams of each sizes bash better."

Pichai besides concisely acknowledged the caller worker survey, successful which employees criticized the company’s increasing bureaucracy.

Another worker question acrophobic however the institution volition stock its plans for imaginable occupation cuts, aft quality leaked astir the Pixelbook pullback and the cuts astatine Area 120, which affected workers' "ability to absorption connected work."

Pichai responded by saying that telling the full workforce of cuts is “not a scaleable mode to bash it,” but helium said helium volition “try and notify the institution of the much important updates.”

The all-hands, known arsenic TGIF (Thank God It's Friday) took spot successful New York, wherever Pichai took questions successful beforehand of a unrecorded assemblage of employees.

“It’s an absorbing prime for Sundar to beryllium successful New York for TGIF the week aft question for employees is chopped to lone the astir concern critical," the worker wrote connected Dory. "I'm definite Sundar has business-critical meetings successful New York.”

Pichai responded, "I deliberation so. I deliberation it qualified." Some successful the assemblage erupted successful laughter.

Pichai dodged worker questions asking astir cost-cutting enforcement compensation. Pichai brought successful full pay past year of $6.3 million, portion different apical executives made implicit $28 million.

He did code the bigger taxable of outgo cuts, and indicated that Google's civilization tin inactive beryllium enjoyable adjacent if immoderate things, similar definite swag items, are getting taken away.

"I retrieve erstwhile Google was tiny and scrappy," helium said. "Fun didn’t ever — we shouldn’t ever equate amusive with money. I deliberation you tin locomotion into a hard-working startup and radical whitethorn beryllium having amusive and it shouldn’t ever equate to money.” 

Employees wanted to cognize wherefore absorption is asking employees to adhere to the return-to-office argumentation “while besides saying nary request to travel/connect in-person."

“I bash recognize immoderate of the question restrictions astatine a clip similar this and RTO and radical wanting to spot each other, decidedly is not ideal," Pichai responded. “If you haven’t seen your squad successful a portion and it’ll assistance your enactment by getting unneurotic successful person, I deliberation you tin bash that. I deliberation that’s wherefore we are not saying nary to travel, we are giving discretion to teams."  

Kristin Reinke, the caput of Google finance, said astatine the gathering that income teams volition person much leeway to question since their jobs necessitate gathering with customers.

“We cognize there’s a batch of worth successful being adjacent to your squad but we’re conscionable asking simply to beryllium thoughtful and bounds your question and expenses wherever you can," Reinke said. For example, she asked that employees temper their expectations for vacation parties.

“Where you person summits and large meetings, delight effort to bash them successful the office," she said. "We decidedly privation radical to inactive person fun. We cognize there’s vacation parties coming up, there’s year-end celebrations, we inactive privation radical to bash that. But we’re conscionable asking them to support them small, support them informal — effort not to spell implicit the top.”

Towards the extremity of the meeting, Pichai addressed a question astir wherefore the institution has shifted from "rapidly hiring and spending to arsenic assertive outgo saving."

Pichai disagreed with the characterization.

“I’m a spot acrophobic that you deliberation what we’ve done is what you would specify arsenic assertive outgo saving," helium said. "I deliberation it’s important we don’t get disconnected. You request to instrumentality a semipermanent presumption done conditions similar this."

He added that the institution is "still investing successful semipermanent projects similar quantum computing," and said that astatine times of uncertainty, it's important "to beryllium smart, to beryllium frugal, to beryllium scrappy, to beryllium much efficient."

Bret Hill, Google's vice president of "total rewards," fielded a question astir raises, equity and bonuses and however they volition beryllium affected by the changes. He said the institution doesn't program to deviate from paying workers “at the apical extremity of the marketplace truthful we tin beryllium competitive.”

Pichai reiterated that sentiment.

“We’re committed to taking attraction of our employees," helium said. "I deliberation we’re conscionable moving done a pugnacious infinitesimal macroeconomically and I deliberation it’s important we arsenic a institution align and enactment together.”

A Google spokesperson said, "Sundar has been speaking to the institution consistently implicit the past fewer months astir ways we tin beryllium much focused." The spokesperson added Pichai reinforced that institution "leaders are moving to beryllium liable and businesslike successful each that their teams do" successful a infinitesimal of uncertainty, and that they're "ensuring that our radical are moving connected the highest interaction / highest precedence work."

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