Alphabet CEO Sundar Pichai gestures during a session of the World Economic Forum (WEF) annual meeting in Davos on January 22, 2020.


Google CEO Sundar Pichai has defended the cloud unit’s new desk-sharing policy for employees, calling some of the company’s offices virtually empty and reminding employees that real estate is expensive.

“It’s clear to me that they’re trying to be efficient and save money, but at the same time also use resources,” Pichai said at a company-wide meeting last week, according to an audio recording obtained by CNBC. “By the way, there are people who regularly complain that they come in and there are big masses of empty tables and it feels like a ghost town — it’s just a bad experience.”

Pichai’s comments follow a CNBC report last month about Google’s plan to ask employees and cloud partners to split jobs in the division’s five largest locations, including New York and San Francisco. The company calls the downsizing effort Cloud Office Evolution (CLOE).

During Alphabet’s fourth-quarter earnings call in early February, executives said they expected Google to incur costs of about $500 million in the current period related to shrinking global office space as the company braces for slowing revenue growth and lingering recession concerns.

Pichai pointed out that many people come to the office “only two days a week,” which he said leads to inefficient use of the current space.

“We have to be good stewards of financial resources,” Pichai said. “We have expensive real estate. And if it’s only used 30% of the time, we have to be careful how we think about it.”

At the same general meeting, Anas Osman, Google Cloud’s vice president of strategy and operations, said that about one-third of employees come into the office at least four days a week, citing data from a pilot project the group conducted on returning to physical places

As part of the pilot, Osman said, employees were given the option of having a dedicated or shared desk.

“Those individual desks were actually used about 35% of the time for four days or more,” Osman said. “We think that’s a good balance of how to find efficiency and create a better experience.”

In some ways, the exchange also led to increased productivity, he said.

Data from the pilot shows that Googlers reported significantly better collaboration when they scheduled days in the office, even when it was in a rotational model and a shared desk,” Osman said.

Pichai said the new policy is only for cloud employees for now, adding that the company is “giving teams the freedom to experiment.” The cloud division makes up about a quarter of the company’s total workforce.

During the meeting, Pichai raised employee concerns about the implementation of the desk-sharing policy and how it was communicated to the workforce. CNBC previously reported that memes criticizing the management’s posts began appearing on Memegen’s internal system. One popular meme said, “Not every cost-cutting measure has to be twisted to sound good to employees.”

In response to​​​​questions and comments from staff​​​​, Pichai read comments that said, “double talk is disrespectful and disappointing” and “bad things happen, don’t make every bad thing sound like a miracle.”

Pichai said in response, “I agree with the opinion here. The feedback is valid.”

“We should always try to be as straightforward as possible,” Pichai said. “I think it’s important to understand that at our scale, almost all communication is public in nature. You’re talking to the whole world and there are many, many stakeholders, so sometimes the nuances are important and words can have a significant impact and I think sometimes you see that reflected in some of the messages.”

A Google spokesperson did not immediately respond to a request for comment.

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