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Tech

Google’s old guard shifts roles as the company searches for itself

Ruth Porat, chief financial officer of Alphabet Inc., speaks during a news conference at Michigan Central Station in Detroit, Michigan, on Friday, Feb. 4, 2022.

Jeff Kowalsky | Bloomberg | Getty Images

A string of Google executives have changed their roles in the span of several months, in a shift that has sidelined many of company’s remaining old guard.

The changes encompass high-profile executives such as CFO Ruth Porat, YouTube CEO Susan Wojcicki, and employee No. 8 Urs Hölzle, among others. Some say they have left their roles for a new challenge and others have left to seek opportunities in AI.

In February, YouTube CEO Susan Wojcicki — one of the most prominent women in Silicon Valley — announced that she was stepping back after nine years at the helm of the Google-owned social media network that grew to be the world’s most popular video service. She had been at Google for more than 25 years, after famously lending her garage to Google founders Sergey Brin and Larry Page to use as their first office while founding the company.

While she’ll still be in an advisory role at Google, she said, she wanted to “start a new chapter.”

She wasn’t the only executive to leave YouTube. Robert Kyncl, YouTube’s chief business officer for 12 years, stepped away to become CEO of Warner Music Group at the beginning of the year. 

In March, CapitalG founder and longtime Google employee David Lawee stepped down from his role after 17 years at Alphabet. His announcement said he wants to explore new areas of interest and spend more time with his family.

Urs Hölzle, who has long overseen Google’s technical infrastructure and was its eighth employee, said he would be stepping back from management after 24 years of leading technical teams, CNBC reported in July. Hölzle will be classified as an “individual contributor,” which means he will be working independently and no longer managing employees. 

Also in July, Ruth Porat announced that she will step down as Alphabet’s chief financial officer after eight years and take a new role as president and chief investment officer. When asked what prompted the timing, Porat, who was previously Morgan Stanley‘s CFO, said it was time for her to take on a different set of challenges.

Porat will also be engaged with policy makers to “recognize the importance of technology” and on issues including employment, economic, competitiveness and infrastructure expansion.”

“We have a steady and experienced leadership team, many of whom have been with the company for well over a decade, ” said Google spokesperson Courtenay Mencini in statement about the shifts. “We also have a strong bench of leaders at Google who can smoothly transition when people who’ve had long and successful careers here decide to pursue new opportunities inside and outside the company.”

Searching for itself in an AI-first world

As Google searches for replacements for executives like Porat, it’s also searching for its own identity in a pivotal moment in the company’s history.

The company was caught flat-footed last fall when OpenAI launched its AI-powered chatbot ChatGPT, and suddenly found itself in a rare spot where its core search business was threatened — if users could simply get answers from an AI-powered chatbot, how long would they keep entering queries into a search engine? It was an ironic moment, given that CEO Sundar Pichai had been talking up the company’s “AI-first” strategy since 2016, with little to show externally for that effort.

In June, Google execs admitted to employees that users are “still not quite happy” with the search experience, CNBC reported. Search boss Prabhakar Raghavan and engineering VP HJ Kim spent several minutes pledging to do a better job to employees while CEO Sundar Pichai noted that it’s still the most trusted search engine.

Geoffrey Hinton, known as “The Godfather of AI” and one of the most respected voices in the field, told the New York Times in May that he was leaving the internet giant after a decade to warn the world about the potential threat of AI, which he said is coming sooner than he previously thought. 

Shortly before that, amid a reorganization in Google’s AI teams, the company promoted the CEO of its DeepMind subsidiary, Demis Hassabis, to lead AI for the entire company, and former McKinsey exec James Manyika to become Google’s senior vice president of technology and society and overseeing Google Research.

Google’s AI head, Jeff Dean, who’s been at Google since 1999, became a chief scientist as part of the change. The company called it a promotion, but it effectively took him out of a large leading role in AI and put him into a role as an individual contributor, reportedly helping oversee Gemini, one of the company’s critical large language models.

The company is also cutting costs, another rarity. The company’s core search product faces changing user behavior, ad pullbacks and an AI boom that requires increasing investment, all amid a slowing economy and investor calls to cut spending.

It’s also staring down multiple federal lawsuits, including an imminent antitrust trial set to begin in September that alleges that Google illegally maintained a monopoly by cutting off rivals from search distribution channels.

More like other big companies, some employees say

Employees’ perceptions of the company have also changed in recent years.

While potential employees still consider Google a top place to work, and it offers extremely competitive perks, it’s grown and become more bureaucratic than in its earlier days.

This perception shift has created a “fragile moment” for Google amid the pressure from OpenAI and Microsoft, argued former Google employee Praveen Seshadri in a Medium post that went viral earlier this year.

“I have left Google understanding how a once-great company has slowly ceased to function,” wrote Seshadri in his blog post that detailed the challenges of Google’s growing bureaucracy.

“Like mice, they are trapped in a maze of approvals, launch processes, legal reviews, performance reviews, exec reviews, documents, meetings, bug reports, triage, OKRs, H1 plans followed by H2 plans, all-hands summits, and inevitable reorgs.”

Former Waze CEO Noam Bardin, who quit Google in 2021, shared Seshadri’s post on LinkedIn. In a blog post a couple years earlier, Noam had written that employees aren’t incentivized to build Google products.

“The problem was me — believing I can keep the startup magic within a corporation, in spite of all the evidence showing the opposite,” he wrote in his critique of the company.

Like Seshadr and Bardin, a number of AI specialists have left the company, saying it had grown too bureaucratic to get things done.

Eight AI researchers who created “Transformers,” an integral part of the infrastructure behind ChatGPT and other chatbots, have left the search giant since 2017 — many of them leaving to start their own companies. Five of them left in 2021 alone.

The last and final was Llion Jones, who departed Google this month to start his own company focused on AI, telling CNBC’s Jordan Novet “the bureaucracy had built to the point where I just felt like I couldn’t get anything done.”

Other AI researchers at Google have made similar complaints in recent months. Several have gone on to start their own companies focused on AI, where they have more control over vision and speed.

In February, longtime product exec Clay Bavor said after 18 “wonderful years” at Google, he was leaving to start an artificial intelligence company with former Salesforce co-CEO Bret Taylor. “We share an obsession with recent advances in AI, and we’re excited to build a new company to apply AI to solve some of the most important problems in business,” Bavor wrote at the time.

“We’ve made intentional efforts throughout the year to move quickly with nimble teams,” said Google spokesperson Courtenay Mencini. “For instance, products like Bard and SGE are being developed by small, fast-moving teams that have been built for these high-priority efforts.”

Despite its efforts, the company faced criticism from investors and its own employees when it quickly tried to announce its ChatGPT competitor Bard, which it started opening up to the wider public in March. While the rollout’s reputation has rebounded after several updates and a successful developer conference, the company still has yet to launch SGE (Search Generative Experience) to the wider public.

The company has also become less flexible as it strives to get employees back into the office.

Google recently cracked down its hybrid three-day-a-week office policy to include badge tracking, and noted attendance will be included in performance reviews, CNBC previously reported. Additionally, employees who already received approval for remote work may now have that status reevaluated.

There’s also a new air of cost-cutting that has taken some employees by surprise.

Even if the company had been considered slower-moving, at least it had been considered secure — commonly known as a place where employees could “rest and vest.” That changed with the company’s first-ever mass layoffs in January, where Alphabet abruptly announced it was eliminating about 12,000 jobs, or 6% of its workforce, in an overnight email. Some employees reportedly arrived at work to discover their badges no longer worked. It then declined to pay out the remainder of employees’ approved leave time.

While the company included competitive severance packages, some employees lost trust in leadership, who had long encouraged employees to be kind, humble and open-minded, or “Googley.”

The company has also cut back on real estate, even asking employees in its cloud unit to share desks. It’s also cut down on desktop PCs and equipment refreshes for employees. It started cutting travel and events late last year.

In an all-hands meeting last September, employees voted to ask CEO Sundar Pichai why the company is “nickel-and-diming employees” with some of its cutbacks on perks and travel.

Google’s culture can still be enjoyable even if some things, like certain swag items, are getting taken away, Pichai argued.

“I remember when Google was small and scrappy,” Pichai said. “We shouldn’t always equate fun with money. I think you can walk into a hard-working startup and people may be having fun and it shouldn’t always equate to money.” 

Pichai’s statement touched a nerve. Yes, many people joined Google to have their work immediately impact many more users than the typical company. It’s still considered one of the top places to work, with opportunities to tackle some of the industry’s biggest problems. But, alongside all this, money and perks had flowed generously, regardless of the speed at which projects moved.

Now, the company faces its biggest challenge yet, which falls on the shoulders of Pichai and the next guard — trying to recreate the magic of its early days with delivering revenue under more pressure than ever.

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