Google CEO Sundar Pichai speaks on stage during the annual Google I/O developer conference in Mountain View, California on May 8, 2018.
Stephen Lam | Reuters
As industry-wide layoffs hit some big tech names Google workers worry that they are next.
While Google has so far avoided the kind of massive job cuts that have hit tech companies, particularly those supported by a slumping ad market, internal anxiety is growing, according to documents seen by CNBC and employees who spoke on condition of anonymity.
Alphabet executives emphasized the need to sharpen the “focus”, reduce the cost of projects and make the company 20% more efficient. There have also been recent changes in performance appraisals, with some staff pointing to reduced travel budgets and fewer bribes as signs that something bigger may be on the horizon.
In July, Alphabet CEO Sundar Pichai launched the “Simplicity Sprint” to improve efficiency in an uncertain economic environment. Just a few miles down the road Meta told employees this month that it was laying off 13% of its workforce, or more than 11,000 employees, as the company expects declining advertising revenue. Tie up announced 20% layoffs in August, and Twitter just cut about half its workforce under new owner Elon Musk. Elsewhere in Silicon Valley, HP said Tuesday that it plans to lay off 4,000 to 6,000 employees over the next three years.
Google’s business hasn’t been hit as hard as many of its peers, but the combination of a potential recession, soaring inflation and rising interest rates is clearly having an impact. The company said last month that YouTube’s ad revenue fell year-on-year as Google posted its weakest period of growth since 2013, except for one quarter during the pandemic. At the time, Google said it would significantly reduce headcount growth in the fourth quarter.
The crypto market, which hit a breakout in Google’s latest results, has fallen further with the collapse of crypto exchange FTX, which has fueled concerns about contagion in the industry.
“Please don’t fire us”
Cutbacks at Google have already taken place around the edges.
The company canceled the next generation of its Pixelbook laptop, cut funding to its own incubator Area 120 and said it was shutting down its Stadia digital gaming service.
Concerns about the shutdown are growing, at least in some quarters. And some employees turn to memes to express their anxieties through humor.
One internal meme shared with CNBC shows the animated character before and after. On the front, the figure has raised hands with the words “inflationary wage increase!” On the back side, a frightened character sits next to a sign that says, “Please don’t fire us.”
Another meme features the names of tech companies — “Meta, Twitter, Amazon, Microsoft” — that recently held layoffs next to an image of a concerned anime character. There were also memes created in reference to a statement last week from activist investor TCI Fund Management, which called on Pichai to cut salaries and staff through “aggressive action”.
Among the workforce, Pichai found himself on the defensive in September when he was forced to explain the company’s repositioning after years of explosive growth. Managers then said that there would be small cuts and did not rule out layoffs.
At a recent meeting with all employees of Google’s internal questioning system called Dory, a number of questions regarding the possibility of layoffs were highly praised. There were also questions about whether managers mismanaged the number of staff.
“It looks like we’ve added 36k full-time roles compared to last year, increasing our headcount by about 24%,” said one of the top-rated questions. “A lot of teams feel like they’re losing headcount rather than adding headcount. Where did this count go? In retrospect, and given the performance concerns, should we have hired so quickly?”
Employees wanted details after the company’s latest earnings call and CFO Ruth Porath’s comments about potential layoffs.
One of the questions was: “Can we get more clarity on how we approach staff numbers in 2023? Do we have any idea how long we need to plan for a heavy headwind?”
Other pollsters asked if employees should expect any direct consequences for our teams, management and/or compensation for the decline in profits we saw during the earnings report and wondered, “How are we going to achieve 20% more productivity? Will enough reorientation or are we waiting for layoffs?”
Change performance reviews
Increasing employee stress levels has been a recent change in performance reviews and future appraisal check-ins.
Earlier this year, Google said it was abandoning its long-standing practice of handing out long promotion packets, which were long forms for employees to fill out and included feedback from bosses and peers. The company has moved to a streamlined process it calls Googler Reviews and Development (GRAD).
A Google spokesperson said in an emailed statement that the GRAD system was launched “to assist with employee development, coaching, training and career growth throughout the year,” adding that it “helps set clear expectations and provide employees with regular feedback communication”.
Google has said the new system will lead to higher pay, but employees say the overhaul has left more room for ambiguity in rankings at a time when the company is looking for ways to cut costs.
The planned overhaul has already run into problems. The company decided to stop using Betterworks, a program that was supposed to help with performance evaluations, employees told CNBC. Executives said they had planned to use a homemade tool instead, but the change came close to an expected performance review at the end of the year.
Guides called “Support Checks,” which are performance reviews targeted at specific employees, began appearing on internal forums. The document, seen by CNBC, said that for those reviewed, “the current performance trajectory is approaching, or already at, a lower rating.”
Three steps are recommended for registration. The first tells workers to “breathe” before accepting feedback from managers. The second is to “understand the feedback” and the third is to “develop a plan”. The document says that enrollment may affect 10% to 20% of employees within a year.
When you add it all up, you get one big question that employees are asking – will a bunch of small cuts turn into something bigger in the future?
CNBC reported last month that employees and managers clashed over cuts to things like gratuities, travel and holidays. Workers complained about the lack of transparency in travel cuts and asked why the company wasn’t saving money by cutting executives’ salaries.
Google’s engineering leaders recently began cracking down on whether employees could access links to an internal meme generator called Memegen, a repository of user-generated memes that has long been part of the company’s open culture.
Last month, Google’s vice president of enterprise engineering said employees needed to remove links to Memegen from their profile pages, known internally as “Moma.” CTOs said in an internal message that having a link to Memegen in profiles “distracts Googlers from focusing.”
Workers naturally flocked to Memegen to laugh at the decision.
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