Sundar Pichai, CEO of Alphabet
Louis Jane | AFP | Getty Images
Days after Google announced the largest round of layoffs in the company’s 25-year history, executives defended the job cuts and took questions from the concerned workforce during a city council meeting Monday.
The Google CEO Sundar Pichai led the company-wide meeting and told employees that executives would see their bonuses cut. He pleaded with employees to stay motivated at a time when Google faces stiff competition in areas such as artificial intelligence, while also trying to explain why employees who lose their jobs are excluded from the bylaws without warning.
“I understand that you are worried about what comes next for your business,” Pichai said. “It’s also sad to lose 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 area is undoubtedly cause for concern.”
CNBC heard audio of the meeting, which followed the company’s announcement Friday that it was cutting 12,000 jobs, or roughly 6% of its full-time workforce. As the staff prepared for potential layoffs, they wanted answers regarding the criteria that were used to decide who stays and who leaves. Some of the laid-off employees have worked long periods and have recently been promoted.
Pichai opened a city council meeting Monday acknowledging the Lunar New Year mass shooting in Southern California Saturday night that killed 11 people and injured at least nine others.
“Many of us are still grappling with the violence in Los Angeles over the weekend and the tragic loss of life,” Pichai said. “I know more details are yet to come out, but it certainly hit our Asian-American community deeply, especially during this Lunar New Year moment and all of us.” We think about it.”
We have more than 30,000 managers.
After moving the conversation to layoffs, Pichai gave some explanation of how he and the executive team made their decisions.
Pichai said he consulted with co-founders and controlling shareholders Sergey Brin and Larry Page, as well as the board of directors.
Pichai said 2021 marked “one of the strongest years in the company’s history,” with revenue growth of 41%. Google has expanded headcount to keep up with this expansion, and Pichai said the company assumes continued growth.
“In this context, we made a set of decisions that could have been right if the trends had continued,” he said. “You have to remember if this trend continues and we are not hired to keep up, we will fall behind in many areas as a company.”
Ruth Porat, chief financial officer of Google and Alphabet, responded to questions from two employees at town hall Monday addressing the company’s recent layoffs.
750 senior leaders were involved in the process, executives said, adding that it took a few weeks to decide who would be laid off.
Fiona Ciccone, director of personnel at Google, said at the meeting. “We wanted to get certainty sooner.”
In terms of criteria for cuts, Cicconi said executives considered areas where work was necessary, but the company had too many people as well as places where work was not critical. Cicconi said the company considers “skillset, time in a role where experience or relationships are relevant and important, and productivity indicators such as sales quotas and performance history.”
Pichai indicated there would be cuts to executive compensation, but provided limited details. He said all vice presidents will “see a very significant reduction in their annual bonuses” this year.
“The older you get, the more your salary is linked to performance. You can reduce your stock awards if you’re not doing well,” he said.
Before the job cuts, Google made the decision to pay 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, CEO of Google Cloud, offered some perspective on areas that saw cuts. Google’s cloud unit has been one of the fastest growing areas for headcount expansion as the company tries to catch up Amazon And Microsoft.
“Engineering hiring is becoming more targeted at areas where we need to fill out the product portfolio,” Kurian said. “We’re adding sales engineers and customers in very specific countries and industries.”
Starting in July, Kurian said, the cloud unit’s goal was to focus on hiring “in response to generative AI across our portfolio.”
As with all other hands meetings, Google executives took questions from the company’s internal forum called Dory. Employees can ask questions there, and they’ll make it to the top when their co-workers give them an upvote.
For Monday’s meeting, some of the top-rated questions related to the process and communication about layoffs. One comment said that employees are “playing ping-and-hope-to-hear to see who lost their job. Can you talk to the calling strategy?”
Rick Osterloh, senior vice president of Devices and Services, said the company “intentionally opted out out of respect for people’s privacy.”
Osterloh said: “We know this can be frustrating for people who are still here. But losing your job without any choice in that is very hard and it’s very personal and not many people want their names on a list distributed to everyone.”
Looking forward to artificial intelligence
Another commenter on Dory wrote, “We cut off access to 12,000 employees without a chance to do knowledge transfers or even allow them to say goodbye. That’s what we do for people who get fired.”
Then came the question: “What is the message for the rest of us?”
Royal Hansen, vice president of security at Google, joined in to describe “an extraordinary set of risks that frankly we’re not very well versed in managing.” He said there are “trade-offs”.
“When you think about our users and how important they are to people’s lives — all the products and services, the sensitive data they trusted — even though it may have been very low, we had to plan for the potential for something to go wrong,” Hansen said. The best option would have been to close corporate access in the manner you described,” he said, referring to the sudden closure.
In response to a question asking how to target employees who have been with the company for more than 15 years, Brian Glaser, vice president and chief talent and learning officer, said, “We all know that no one is immune from a change in jobs.”
Pichai reminded the employees that the company has important work ahead, particularly in terms of rapid advances in artificial intelligence. Last month, Google employees asked executives in a multi-hands meeting whether the AI-powered ChatGPT chatbot was a “missed opportunity” for Google. ”
Pichai said Monday that it “will be an important year given the rapid developments in artificial intelligence,” which will have an impact across the company.
“There is a paradigm shift in AI and I think with the focus of our talent and the work we’ll do here, it’s going to be a big draw and I hope that continues,” Pichai added. “We have to keep earning it . . . “
Close the town hall by bringing the discussion back to the topic at hand.
It’s clear, Pichai said, “how much you all care about your colleagues and the company.” He added, “I know it will take a lot of time to process this moment and what I heard today as well.”
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