Sundar Pichai, CEO, Alphabet
Lluis gene | AFP | Getty Images
Days after Google announced the biggest round of layoffs in the company’s 25-year history, executives defended the job cuts and answered questions from a concerned workforce during a town hall meeting Monday.
Google CEO Sundar Pichai chaired the company-wide meeting and told employees executive bonuses will be cut. He asked employees to stay motivated as Google faces increased competition in areas like artificial intelligence, while trying to explain why employees who had lost their jobs were being removed from the internal system without warning.
“I understand your concern about what’s next for your work,” Pichai said. “Also very saddened by 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 undoubtedly troubling.”
CNBC listened to audio of the meeting that followed the company’s announcement Friday that it was cutting 12,000 jobs, or about 6% of its full-time employees. As employees prepared for a possible layoff, they wanted answers about the criteria used to determine who would stay and who would go. Some of the employees who were laid off had served long tenures and were recently promoted.
Pichai opened Monday’s town hall meeting recognizing the Lunar New Year mass shooting in Southern California on Saturday night that killed 11 people and wounded at least nine others.
“Many of us are still grappling with the violence in LA over the weekend and the tragic loss of life,” Pichai said. “I know more details are yet to come, but it has definitely affected our Asian American community deeply, especially during the Lunar New Year and we are all thinking of them.”
“We have over 30,000 managers”
After moving the conversation to downsizing, Pichai offered an explanation of how he and the executive team made his decisions.
Pichai said he consulted with founders and controlling shareholders Sergey Brin and Larry Page, as well as the board.
Pichai said 2021 was “one of the strongest years we’ve had in the company’s history,” with sales growing 41%. Google increased headcount to accommodate that expansion, and Pichai said the company expects growth to continue.
“In this regard, we made a number of decisions that would have been correct had trends continued,” he said. “You have to remember that if the trend had continued and we hadn’t hired to keep up, we would be falling behind as a company in many areas.”
Google and Alphabet CFO Ruth Porat answered some employee questions surrounding the recent layoff at City Hall on Monday.
Executives said 750 senior executives were involved in the process, adding that it took a few weeks to determine who would be fired.
“We have over 30,000 managers at Google, and consulting with all of them would have made this an open process that would have taken additional weeks or even months to come to a decision,” said Fiona Cicconi, chief people officer from Google “We wanted to have certainty earlier.”
Regarding the criteria for cuts, Cicconi said executives looked at areas where work was necessary, but the company had too many employees and places where the work itself was not critical. Cicconi said the company considers “skills, time in the role where experience or relationships are relevant and important, productivity indicators such as sales quotas and performance history.”
Pichai hinted that there would be cuts in executive pay, but gave limited details. He said that all senior vice presidents “will see a very significant reduction in their annual bonus” this year.
“The older you are, the more tied your pay is to performance,” he said. “You can reduce your stock awards if performance isn’t great.”
Before the job cuts, Google had made the decision to pay out 80% of bonuses this month, with the rest expected in March or April. In previous years, the full bonus was paid in January.
Thomas Kurian, the CEO of Google Cloud, offered an outlook on the areas where cuts have been made. Google’s cloud unit has been one of the fastest growing areas for headcount expansion as the company tries to catch up with Amazon and Microsoft.
“Our engineering hiring is much more targeted in areas where we need to complete a product portfolio,” Kurian said. “We hire sales and customer engineers in very specific countries and industries.”
Kurian said that as of July, the cloud unit’s goal is to focus on hiring “in response to generative AI across our portfolio.”
As with other all-hands meetings, Google executives answered questions from the company’s internal forum called Dory. Employees can post questions there, and they rise to the top if their peers give them a positive vote.
At Monday’s meeting, some of the top-scoring questions had to do with the process and communications surrounding the layoffs. A comment said staff were “playing a ping-and-hope-to-hear-back game to find out who lost their job. Can you say something about the communication 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 this can be frustrating for people who are still here,” Osterloh said. “But losing your job without having a choice is very difficult and very personal, and a lot of people don’t want their name on a list distributed to everyone.”
Looking ahead to AI
Another commenter on Dory wrote: “We have blocked access for 12,000 employees without being able to carry out knowledge transfers 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?”
Royal Hansen, Google’s vice president of security, chimed in to describe “an unusual set of risks that, frankly, we’re not very good at managing.” He said there were “compromises”.
“If you think about our users and how important they have become in people’s lives – all the products and services, the sensitive data that they have entrusted to us – even if it was a very small probability, we had to reckon with the possibility, something could go horribly wrong,” Hansen said. “The best option was to shut down corporate access the way you described it,” he said, referring to the abrupt shutdown.
When asked how employees who have been with the company for more than 15 years were specifically cut, Brian Glaser, vice president and chief talent and learning officer, replied: “We all know that nobody in our company is immune to changes in their careers. ”
Pichai reminded employees that important work lies ahead for the company, especially in terms of rapid advances in AI. Last month, at an all-hands meeting, Google employees asked executives if the AI chatbot ChatGPT represents a “missed opportunity” for Google.
Pichai said Monday that “given the rapid advances in AI, it will be an important year” that will impact the entire company.
“There’s a paradigm shift in AI and I think with the concentration of talent that we have and the work that we’re going to be doing here, it’s going to be a huge draw and I hope that continues to be the case will be,” added Pichai. “We have to keep earning it.”
He ended the town hall by returning the discussion to the topical issue.
It’s evident, Pichai said, “how much you all care about your colleagues and the company.” He added, “I know it’s going to take a lot longer to process this moment and what you heard today .”
LOOK AT: Google is getting leaner
