Google employees vented their frustration at the company’s two most senior officials during an all-hands meeting, citing a “significant decline in morale” over cost-cutting and lack of pay raises — despite the search giant’s robust earnings.
CEO Sundar Pichai and Chief Financial Officer Ruth Porat were peppered with questions during last week’s gathering — just weeks after Google fired roughly 50 workers for staging sit-ins at its offices in New York and California over cloud contracts with Israel’s military.
“We’ve noticed a significant decline in morale, increased distrust and a disconnect between leadership and the workforce,” a comment posted on an internal forum ahead of the meeting read.
“How does leadership plan to address these concerns and regain the trust, morale and cohesion foundational to our company’s success?”
The top brass apparently avoided answering the question, using artificial intelligence to summarize employee comments and questions for the forum, according to CNBC.
The staffers’ biggest bone of contention revolved around the lack of pay bumps in light of the company’s strong quarterly performance.
“Despite the company’s stellar performance and record earnings, many Googlers have not received meaningful compensation increases” a top-rated employee question said during last week’s gathering.
“When will employee compensation fairly reflect the company’s success and is there a conscious decision to keep wages lower due to a cooling employment market?”
Porat, who is due to step down soon, took to the microphone and told employees: “Our priority is to invest in growth.”
“Revenue should be growing faster than expenses,” she said.
Porat admitted that management erred in its handling of investments.
“The problem is a couple of years ago — two years ago, to be precise — we actually got that upside down and expenses started growing faster than revenues,” the CFO told workers.
“The problem with that is it’s not sustainable.”
Pichai chimed in, saying that the company made a mistake by over-hiring during the pandemic and that it was now in the midst of a course correction.
The CEO admitted that “leadership has a lot of responsibility here” and that “it’s an iterative process.”
By the end of 2022, Alphabet’s global workforce numbered more than 190,000 people — or 22% higher from the year before and 40% higher than 2020. Last year, Google laid off more than 12,000 workers and cut back on office perks while mandating a return to office — a sign that the pandemic-era swoon was over.
Last month, the company fired 200 more workers, aside from the roughly 50 staffers involved in the protests, and shifted jobs abroad to Mexico and India.
The workers have also complained about tighter deadlines and fewer resources with which to get tasks done.
“Given the recent headcount and positive earnings, what is the company’s headcount strategy?” one question read.
Pichai said Google is “working through a long period of transition as a company” that includes cutting expenses and “driving efficiencies.”
“We want to do this forever,” Pichai said of becoming more efficient.
“To be clear, we’re growing our expenses as a company this year, but we’re moderating our pace of growth” Pichai said.
“We see opportunities where we can re-allocate people and get things done.”
The Post has sought comment from Google.
Two weeks ago, Google announced its first-ever dividend as well as a $70 billion stock buyback — sending the company’s share price surging by some 16%.
Google parent company Alphabet is returning capital to shareholders while spending billions of dollars on data centers to catch up with rivals on generative artificial intelligence.
Alphabet beat expectations for the quarter in sales, profit and advertising – metrics that are all closely watched.
Revenue was $80.54 billion for the quarter ended March 31, compared with estimates of $78.59 billion, according to LSEG data.
Meanwhile, Google Cloud revenue grew 28% in the first quarter, boosted by a boom in generative AI tools that rely on cloud services to deliver the technology to customers.
Alphabet’s capital expenditures were $12 billion, a 91% rise from a year prior, a figure Gabelli Funds portfolio manager Hanna Howard called “higher than anticipated.”
Porat said on the call with analysts that she expects such expenditures to be at that level or higher throughout the remainder of the year, as the company spends to build artificial intelligence offerings.
Despite the surge in capital expenditures, Porat said the operating margin in 2024 would be higher than last year, without elaborating.
Employees took note of Google’s massive investment in AI.
“To many people, there’s a clear disconnect between spending billions on stock buybacks and dividends and re-investing in AI and retraining critical Googlers,” one Googler wrote on the internal message board.
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