Google has been experiencing significant growth, with its market cap surpassing $2 trillion after a blowout earnings report in April. However, employees have raised concerns about the disconnect between the company’s performance and their compensation, as well as the duration of cost-cutting measures. Leadership has faced criticism for decisions related to post-pandemic return-to-office mandates, cloud contracts with the military, layoffs, and internal advancement opportunities. Despite strong earnings and a record-breaking first quarter, employees have not seen meaningful compensation increases, leading to questions about the company’s priorities and investments in artificial intelligence.
During an all-hands meeting with CEO Sundar Pichai and CFO Ruth Porat, employees voiced their concerns about morale, trust, and the company’s financial decisions. Porat acknowledged past mistakes in budgeting and explained that expenses had grown faster than revenues in recent years. She emphasized the importance of investing in growth and managing expenses to ensure sustainability. Pichai acknowledged that the company had overstaffed during the pandemic and is now undergoing a course correction to manage headcount growth. Despite criticism of his compensation package, Pichai defended the company’s cost-cutting measures and commitment to driving efficiencies.
Employees raised questions about Google’s use of cash, particularly regarding the company’s buyback and decision to distribute cash to shareholders. Porat addressed concerns about the amount of cash on the balance sheet and emphasized the importance of maintaining a balance between investing in growth initiatives and returning value to shareholders. Pichai joked about the length of Porat’s response and acknowledged leadership’s responsibility in addressing employee concerns. He reassured employees that the company is investing in its biggest priorities and will continue to hire in key areas, while also moderating the pace of growth to reallocate resources effectively.
Despite strong financial performance, including the announcement of a dividend and a $70 billion buyback, employees at Google continue to express concerns about compensation, layoffs, and the company’s long-term strategy. Pichai assured employees that the majority of layoffs would be completed in the first half of 2024, with a smaller scale expected in the second half of the year. The company remains focused on managing headcount growth and making disciplined choices regarding new projects and investments. Leadership emphasized the need for transparency and clear communication with employees, acknowledging the challenges of navigating a period of transition and change within the company.
In response to employee questions and comments, Google executives reiterated their commitment to investing in growth, managing expenses, and addressing concerns about compensation and job security. The company plans to provide most employees with a pay raise this year, including salary increases, equity grants, and bonuses. Despite ongoing layoffs and cost-cutting measures, executives expressed confidence in the company’s ability to navigate challenges and maintain a disciplined approach to managing headcount growth. Google is working towards addressing employee concerns, building trust, and ensuring that its workforce remains engaged and motivated in light of the company’s growth and financial success.
