Google avoided mass layoffs, but employees fear they will come

Google CEO Sundar Pichai speaks on stage during the Google I/O annual developer conference in Mountain View, California, May 8, 2018.

stephen | Reuters

As industry-wide layoffs hit bigger names in tech, some Google workers worry about being next.

While Google has so far avoided the widespread job cuts that have hit tech companies, especially those buoyed by a shrinking ad market, internal anxiety is on the rise, according to documents seen by CNBC and employees. who spoke on condition of anonymity.

Alphabet executives highlighted the need to sharpen “focus,” reduce project costs and make the company 20% more efficient. There’s also been a recent shift in performance reviews, and some employees point to lower travel budgets and less swag as signs that something bigger may be on the horizon.

In July, Alphabet CEO Sundar Pichai launched the “Simplicity Sprint” in an effort to boost efficiency in an uncertain economic environment. A few kilometers from the road, Meta told employees this month that it was laying off 13% of its staff, or more than 11,000 employees, as the company relies on falling ad revenue. Instantaneous announced a 20% reduction in August, and Twitter has just cut about half of its workforce under new owner Elon Musk. Elsewhere in Silicon Valley, resume said on 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, runaway inflation and rising interest rates is having an obvious impact. Last month, the company said YouTube’s ad revenue fell from a year earlier as Google generated its weakest period of growth since 2013, barring a quarter during the pandemic. Google said at the time that it would significantly reduce headcount growth in the fourth quarter.

The crypto market, which hurt Google’s latest results, fell further with the collapse of crypto exchange FTX, prompting heightened concerns about industry contagion.

“Please Don’t Fire Us”

Cuts at Google have already taken place around the edges.

The company canceled the next generation of its Pixelbook laptop, cut funding for its internal Area 120 incubator and said it would shut down its Stadia digital gaming service.

Concerns about terminations are growing, at least in some corners. And some employees are turning to memes to express their anxieties through humor.

An internal meme shared with CNBC shows an animated character before and after. On the front side, the character has his hands raised with the caption “Inflation Raises Wages!” On the reverse side, a frightened figure sits next to the caption, “please don’t fire us.”

Another meme has names of tech companies – “Meta, Twitter, Amazon, Microsoft” – that recently made layoffs alongside an image of a worried anime character. Memes have also been 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”.

Activist investor calls on Alphabet to cut costs amid slowing revenue

Among the workforce, Pichai found himself on the defensive in September as he was forced to explain the company’s changing position after years of supercharged growth. Executives said at the time there would be small cuts, and they did not rule out layoffs.

At a more recent town hall meeting, a number of questions about the potential for layoffs were highly rated by staff members on Google’s internal question system called Dory. There were also questions about poor workforce management by executives.

“We appear to have added 36,000 full-time positions year-over-year, which has increased headcount by approximately 24%,” reads one of the top-rated questions. “A lot of teams feel like they’re losing staff, not gaining it. Where did that staff go? In hindsight, and given concerns about productivity, should we have been hiring so quickly?”

Employees wanted details following the company’s latest earnings call and comments from chief financial officer Ruth Porat about possible cuts.

One question read: “Can we have more clarity on how we are approaching the workforce for 2023? Do we have any idea how long we need to plan for difficult headwinds?

Others asked if employees “should expect direct consequences to our teams, their management, and/or their compensation from the reduced earnings we saw on the earnings call” and wondered. : “How are we going to achieve 20% more productivity? Will the refocusing be enough or are we waiting for layoffs?

Editing performance reviews

Rising employee stress levels have been a recent change in performance reviews and upcoming appraisal audits.

Earlier this year, Google said it was abandoning its long-standing practice of handing out lengthy promotion packets, which were lengthy forms for employees to fill out that included notices from bosses and co-workers. The company moved to a streamlined process called Googler Reviews and Development (GRAD).

A Google spokesperson said in an emailed statement that the GRAD system was launched “to assist in the development, coaching, learning and career progression of employees throughout the year.” , adding that it “helps set clear expectations and provide employees with regular feedback.”

Google said a new system would lead to higher wages, but workers say the overhaul has left more room for ambiguity in the ratings at a time when the company is looking for ways to cut costs.

The planned revamp has already run into problems. The company has decided to end its use of Betterworks, a program supposed to help with performance appraisals, employees told CNBC. Executives said they planned to use an in-house developed tool instead, but the change came significantly closer to performance checks planned for the end of the year.

A guide titled “Support Check-Ins,” which are performance reviews targeting certain employees, has started popping up in internal forums. The document, seen by CNBC, says for those receiving the rating, “the current performance trajectory is heading towards, or already is in, a lower rating.”

Three steps are recommended for recordings. The first invites workers to “breathe” before taking into account the comments of managers. The second is to “understand the feedback” and the third is to “develop a plan”. The document says the recordings can affect 10-20% of staff over the course of a year.

Add it all up, and a big question employees ask is, will a bunch of small cuts turn into something bigger in the future?

CNBC reported last month that employees and executives clashed over cuts to things like swag, travel and parties. Workers complained about the lack of transparency around travel cuts and questioned why the company wasn’t saving money by cutting executive salaries.

Google engineering officials recently began restricting employees’ ability to access links to the internal meme generator called Memegen, a repository of user-generated memes that has long been part of Google’s open culture. company.

Last month, a vice president of corporate engineering at Google said employees should remove Memegen links from their profile pages, known internally as “Moma”. Engineering directors said in an internal post that having a Memegen link on profiles “distracts Googlers from focusing.”

Workers naturally flocked to Memegen to mock the decision.

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