Sundar Pichai, CEO of Alphabet

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Days after Google announced the largest round of layoffs in the company’s 25-year history, executives defended the job cuts and answered questions from concerned employees during a town hall meeting Monday.

Google CEO Sundar Pichai presided over a company-wide meeting and told employees that executives’ bonuses would be cut. He asked employees to stay motivated as Google faces increased competition in areas such as artificial intelligence, and tried to explain why the employees who lost their jobs were removed from the internal system without warning.

“I understand you’re worried about what’s next for your job,” Pichai said. “Also very sad about the loss of some really good colleagues across the company. For those of you outside the US, the delay in being able to make and communicate decisions about roles in your region is certainly a concern.”

CNBC listened to audio of the meeting, which followed the company’s announcement Friday that it would cut 12,000 jobs, or about 6% of its full-time workforce. As employees prepared for potential layoffs, they wanted answers about the criteria used to determine who would stay and who would leave. Some of the laid-off employees had long tenures and were recently promoted.

Pichai opened Monday’s town hall meeting by acknowledging the mass shooting in southern California on Saturday night that left 11 people dead and at least nine others injured.

“Many of us are still struggling with the violence in Los Angeles over the weekend and the tragic loss of life,” Pichai said. “I know there aren’t any more details yet, but this has definitely had a big impact on our Asian American community, especially around Lunar New Year, and we’re all thinking of them.”

“We have more than 30,000 managers”

Turning to the job cuts, Pichai offered some explanation for how he and the executive team made the decisions.

Pichai said he consulted with founders and controlling shareholders Sergey Brin and Larry Page, as well as the board of directors.

Pichai said 2021 was “one of the strongest years in the company’s history” with revenue up 41%. Google has increased headcount in line with the expansion, and Pichai said the company anticipates that growth will continue.

“In this context, we have taken a number of decisions that could be correct if the trends continue,” he said. “You have to remember that if the trend continued and we didn’t hire to keep up, we would be behind in a lot of areas as a company.”

Google and Alphabet CFO Ruth Porat answered several questions from employees at a town hall Monday regarding the recent layoff.

Executives said 750 senior executives were involved in the process, adding that it took several weeks to determine who would be fired.

“We have more than 30,000 managers at Google, and to consult all of them would be an open process that would take additional weeks or even months to reach a decision,” said Fiona Cicconi, Google’s chief human resources officer. “We wanted to get confidence sooner.”

Regarding the criteria for the cuts, Cicconi said executives looked at areas where work was needed but the company was overstaffed, as well as places where the work itself was not critical. Cicconi said the company considers “skill set, time in position, where experience or relationships are relevant and important, performance metrics such as sales quotas and performance history.”

Pichai indicated there would be cuts in executive compensation, but provided limited details. He said all senior vice presidents “will see a very significant reduction in their annual bonuses” this year.

“The older you are, the more your compensation is tied to performance,” he said. “You can reduce your subsidies if your performance isn’t great.”

Before the job cuts, Google decided to pay 80% of the bonuses this month, with the rest waiting until March or April. In previous years, the full premium was paid in January.

Thomas Kurian, CEO of Google Cloud, offered some insight into the areas where the reduction occurred. Google’s cloud division has been one of the fastest-growing areas for staff expansion, as the company tries to catch up Amazon and Microsoft.

“Our engineering hiring is much more targeted in areas where we need to add to our product portfolio,” Kurian said. “We are adding sales and customer engineers in very specific countries and industries.”

Kurian said that starting in July, the goal of the cloud division was to focus on hiring “in response to generative artificial intelligence in our portfolio.”

As in other general meetings, Google executives asked questions on the company’s internal forum called Dory. Employees can post questions there, and they rise to the top when their peers vote on them.

At Monday’s meeting, some of the top-rated questions were about the process and communication surrounding the layoffs. One comment said employees are “playing a game of ping-and-hope-to-hear-back to find out who lost their job. Can you talk to the communications strategy?”

Rick Osterloh, senior vice president of devices and services, said the company “deliberately did not share out of respect for people’s privacy.”

“We know it can be frustrating for people who are still here,” Osterloh said. — But losing a job without a choice is very difficult and very personal, and many people do not want their names to be on the list that is distributed to everyone.

Looking ahead to AI

Another commenter, Dory, wrote: “We’ve locked out 12k employees without being able to pass on knowledge or even let them say goodbye to their colleagues. That’s what we do with people who get fired.”

Then came the question, “What is the message for those of us who are left behind?”

Royal Hansen, vice president of security at Google, chimed in to describe “an unusual set of risks that, frankly, we’re not very good at managing.” He said there are “trade-offs”.

“When you think about our users and how critical they’ve become in people’s lives — all the products and services, the sensitive data they’ve trusted us with — even if the probability was very low, we had to plan for the possibility that something could go wrong,” Hansen said. “The best option was to shut down corporate access the way you described,” he said, referring to the sudden shutdown.

When asked how the 15-plus-year employees were cut, Brian Glaser, vice president and chief human resources and learning officer, said, “We all know that no one is immune to change. our career”.

Pichai reminded employees that the company has important work ahead of it, particularly in relation to rapid advances in artificial intelligence. Last month, Googlers asked executives at an all-hands meeting whether AI chatbot ChatGPT was a “missed opportunity” for Google.

Pichai said on Monday that “this is going to be an important year given the rapid advances in artificial intelligence” that will have an impact across the company.

“There’s a paradigm shift in AI, and I think the concentration of talent that we have and the work that we’re going to do here is going to be a big draw, and I hope that continues to be the case,” Pichai added. “We have to keep earning it.”

He closed the town hall, bringing the discussion back to the topic at hand.

It’s obvious, Pichai said, “how much you care about your colleagues and the company.” He added: “I know it will take a lot longer to process this moment and what you heard today.”

WATCH: Google is getting leaner

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