Google employees vented their frustrations with the company’s two top executives in an all-hands meeting, citing a “significant drop in morale” over cost cuts and a lack of raises despite the search giant’s strong profits.
CEO Sundar Pichai and Chief Financial Officer Ruth Porat faced questions at a rally last week about Google’s sit-ins at its New York and California offices over cloud contracts with the Israeli military. This was just weeks after the company laid off 50 employees.
“There is a significant drop in morale, growing distrust, and a disconnect between leadership and employees,” said a comment posted on an internal forum ahead of the meeting.
“How will management address these concerns and restore the trust, morale and cohesion that are fundamental to our success?”
Senior management apparently avoided answering questions and instead used artificial intelligence to compile employee comments and forum questions. According to CNBC.
The employees’ biggest point of contention centered on the lack of pay increases despite the company’s strong quarterly results.
“Despite the company’s impressive performance and record revenues, many Googlers have not received significant pay increases,” said a question from the highest-rated employee at a gathering last week.
“When does employee compensation accurately reflect a company’s success? Is there a conscious decision to keep wages low as the job market cools?”
Mr. Porat, who is set to step down soon, took to the microphone and told employees, “Our priority is investing in growth.”
“Revenues should increase faster than expenses,” she said.
Porat acknowledged that management had made mistakes in handling the investment.
“The problem was a few years ago, two years ago to be exact, that things actually turned around and expenses started growing faster than revenue,” the CFO told employees.
“The problem is that it’s not sustainable.”
Pichai agreed, saying the company made the mistake of overhiring during the pandemic and is now in the midst of a course correction.
The CEO acknowledged that “leadership has a lot of responsibility here” and that “it’s an iterative process.”
By the end of 2022, Alphabet’s global workforce will exceed 190,000, an increase of 22% from the previous year and 40% from 2020. Last year, Google laid off more than 12,000 employees, requiring them to pay back their wages and cutting office benefits. Back to the office — a sign that the pandemic era is quickly over.
In addition to the roughly 50 employees involved in the protests, the company last month fired another 200 people and relocated them to other countries, including Mexico and India.
Workers are also frustrated by tighter deadlines and fewer resources to get the job done.
“Given recent employee numbers and positive revenue, what is the company’s headcount strategy?” I read one question.
Pichai said Google is “engaging in an extended period of transition as a company,” including cutting costs and “driving efficiencies.”
“We want to do this forever,” Pichai said of efficiency.
“Let me be clear: As a company, our expenses have increased this year, but the pace of growth has slowed,” Pichai said.
“We think there is an opportunity to redeploy talent and get the job done.”
The Post has reached out to Google for comment.
Two weeks ago, Google announced its first-ever dividend and $70 billion in stock buybacks, sending its stock price up about 16%.
Google’s parent company, Alphabet, is spending billions of dollars on data centers to catch up with rivals in generative artificial intelligence, while returning capital to shareholders.
Alphabet beat expectations for the quarter, with sales, profits and advertising all being closely watched metrics.
Revenue for the quarter ended March 31 was $80.54 billion, compared to expectations of $78.59 billion, according to LSEG data.
Meanwhile, Google Cloud’s revenue rose 28% in the first quarter, driven by a boom in generative AI tools that rely on cloud services to provide technology to customers.
Alphabet’s capital expenditures were $12 billion, up 91% from a year ago, a number that Gabelli Funds portfolio manager Hannah Howard called “better than expected.”
Porat said on a conference call with analysts that he expects such spending to be at or above that level throughout the year as the company spends to build artificial intelligence products.
Porat said operating margins in 2024 will be higher than last year despite a surge in capital spending, but he did not elaborate.
Employees took note of Google’s huge investment in AI.
“For many people, there is a clear disconnect between spending billions of dollars on stock buybacks and dividends and reinvesting in AI and reskilling key Google employees,” said one Google employee. wrote on the company bulletin board.
with post wire
