Google has avoided mass layoffs, but employees fear they are coming

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

Stephen Lamb | Reuters

While industry-wide layoffs hit bigger tech names, some Google workers fear they are next.

While Google has so far avoided widespread job cuts hitting tech companies, especially those supported by a struggling advertising market, internal anxiety is rising, according to documents viewed by CNBC and employees who spoke on condition of anonymity.

Alphabet executives have stressed the need to sharpen “focus”, slash project costs and make the company 20% more efficient. There’s also been a recent shift in performance reviews, and some employees point to declining 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 a bid to bolster efficiency in an uncertain economic environment. Just a few miles down the road, half told employees this month that it is laying off 13% of its staff, or more than 11,000 employees, as the company expects ad revenue to decline. rushed announced a 20% cut in August, and Twitter just cut about half of its workforce under new owner Elon Musk. Elsewhere in Silicon Valley, hp said Tuesday 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, rising inflation, and rising interest rates is having a clear impact. Last month, the company said YouTube’s ad revenue was down from a year earlier as Google delivered its weakest period of growth since 2013, aside from a quarter during the pandemic. Google said at the time that it would significantly reduce headcount growth in the fourth quarter.

The cryptocurrency market, which dented Google’s latest results, fell further with the collapse of cryptocurrency exchange FTX, leading to growing concerns about sector contagion.

‘Please don’t fire us’

Google cuts have already taken place around the edges.

The company has canceled the next generation of its Pixelbook laptop, cut funding to its internal incubator Area 120 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 features an animated character before and after. On the front, the figure raised his hands with the caption “Inflation pay rise!” On the next side, a frightened character sits next to the caption “don’t fire us please”.

Another meme has the names of tech companies — “Meta, Twitter, Amazon, Microsoft” — that recently conducted layoffs alongside an image of a concerned anime character. There were also memes created in reference to a statement last week by activist investor TCI Fund Management, which called on Pichai to cut wages and staff through “aggressive actions”.

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

At a more recent general meeting, a number of questions related to potential dismissal were rated very positively by Google’s internal questioning system staff called Dory. There were also questions about executives mismanaging headcount.

“We appear to have added 36,000 full-time roles year-on-year, increasing headcount by approximately 24%,” reads one of the top-voted questions. “Many teams feel they are losing staff, not gaining them. Where did this head count go? In retrospect, and given productivity concerns, should we have hired so quickly?”

Employees wanted details following the company’s latest earnings call and comments from CFO Ruth Porat regarding possible cuts.

One question read, “Can we get a little more clarity on how we’re approaching headcount for 2023? Do we have an idea of ​​how much time we need to plan for challenging headwinds?”

Other respondents asked whether employees “should expect any direct consequences to our teams, management and/or compensation for the profit reduction we saw in the earnings call” and wondered, “how are we going to achieve 20 % more productivity Will it be enough to refocus or do we expect layoffs?

Performance change revisions

Increased employee stress levels have been a recent change to performance reviews and upcoming evaluation checks.

Earlier this year, Google said it was abandoning its longstanding practice of handing out lengthy promotional packs, which were long forms employees had to fill out and included reviews from bosses and coworkers. 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 aid employee development, coaching, learning and career advancement throughout the year,” adding that ” helps set clear expectations and provide employees with regular feedback.”

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

The planned review has already run into problems. The company has decided to end its use of Betterworks, a program that was supposed to help evaluate performance, employees told CNBC. Executives said they planned to use a home-grown tool instead, but the change came uncomfortably close to expected year-end performance checks.

A guide titled “Support Check-Ins,” which are performance reviews aimed at specific employees, has begun appearing in internal forums. The document, viewed by CNBC, states for those receiving the review, “the current performance trajectory is headed for, or already in, a lower rating.”

Three steps are recommended for check-in. The first directs workers to “breathe” before collecting feedback from managers. The second is “understanding the feedback” and the third is “making a plan”. The document states that check-ins can affect 10% to 20% of staff over the course of a year.

Add it all up and a big question employees are asking is: Will a bunch of small cuts turn into something grander in the future?

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

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

Last month, a VP of corporate engineering at Google said employees must remove Memegen links from their profile pages, known internally as “Moma.” .”

Workers naturally flocked to Memegen to mock the decision.

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