Google CEO defends job cuts in animated town hall as employees demand clarity on process

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Sundar Pichai, CEO, Alphabet
Lluis Gene | AFP | Getty Photographs

Days after Google introduced the biggest spherical of layoffs within the firm’s 25-year historical past, executives defended the job cuts and took questions from a involved workforce throughout a city corridor assembly Monday.

Google CEO Sundar Pichai led the companywide assembly and instructed staff executives will see their bonuses reduce. He pleaded with staffers to stay motivated as Google faces heightened competitors in areas like synthetic intelligence, whereas additionally making an attempt to clarify why staff who misplaced their jobs had been faraway from the interior system with out warning.

“I perceive you might be frightened about what comes subsequent to your work,” Pichai stated. “Additionally very unhappy for the lack of some actually good colleagues throughout the corporate. For these of you outdoors the U.S., the delay in having the ability to make and talk selections about roles in your area is undoubtedly inflicting anxiousness.”

CNBC listened to audio of the assembly, which adopted the corporate’s announcement Friday that it is eliminating 12,000 jobs, or roughly 6% of the full-time workforce. Whereas staff had been bracing for a possible layoff, they needed solutions relating to the standards that was used to find out who would keep and who would go. A few of the laid-off staffers had lengthy tenures and had been not too long ago promoted.

Pichai opened Monday’s city corridor assembly acknowledging the Lunar New Yr mass shooting in Southern California on Saturday night time that killed 11 folks and injured at the very least 9 others.

“Many people are nonetheless grappling with the violence in LA over the weekend and the tragic loss in life,” he stated. “I do know extra particulars are but to return out, however it’s undoubtedly hit our Asian American neighborhood in a deep means, particularly through the second of Lunar New Yr and we’re all considering of them.”

‘We’ve got over 30,000 managers’

After shifting the dialog to job cuts, Pichai provided some rationalization for a way he and the chief crew made their selections.

Pichai stated he consulted with the founders and controlling shareholders, Sergey Brin and Larry Web page, in addition to the board of administrators.

Pichai stated 2021 marked “one of many strongest years we’ve ever had within the historical past of the corporate,” with 41% income development. Google elevated head depend to match that growth, and Pichai stated the corporate was assuming development would persist.

“In that context, we made a set of choices that may have been proper if the traits continued,” he stated. “It’s a must to bear in mind if the development had continued and we had not employed to maintain tempo, we’d fall behind in lots of areas as an organization.”

Google and Alphabet finance chief Ruth Porat responded to some worker questions in Monday’s city corridor that addressed its latest layoff.

Executives stated 750 senior leaders had been concerned within the course of, including it took just a few weeks to find out who can be laid off.

“We’ve got over 30,000 managers at Google and to seek the advice of with all of them would have made this an open course of the place it could have taken extra weeks and even months to make a decision,” stated Fiona Cicconi, Google’s chief folks officer, on the assembly. “We needed to get certainty sooner.”

Relating to the standards for cuts, Cicconi stated execs checked out areas the place the work was obligatory, however the firm had too many individuals in addition to locations the place the work itself wasn’t vital. Cicconi stated the corporate thought of “ability set, time in function the place expertise or relationships are related and matter, productiveness indicators like gross sales quotas and efficiency historical past.”

Pichai indicated there can be government compensation cuts however supplied restricted particulars. He stated all senior vice presidents “will see a really vital discount of their annual bonus” this yr.

“The extra senior you might be, the extra your compensation is tied to efficiency,” he stated. “You possibly can scale back your fairness grants if efficiency will not be nice.”

Earlier than the job cuts, Google had made the choice to pay out 80% of bonuses this month with the remaining anticipated in March or April. In prior years, the complete bonus was paid in January.

Thomas Kurian, CEO of Google Cloud, provided some perspective on the areas that noticed cuts. Google’s cloud unit has been one of many fastest-growing areas for head depend growth as the corporate tries to catch Amazon and Microsoft.

“Our engineering hiring is being far more focused in areas the place we have to fill out a product portfolio,” Kurian stated. “We’re including gross sales and buyer engineers in very particular international locations and industries.”

Kurian stated that beginning in July, the cloud unit’s goal was to focus hiring “in response to generative AI throughout our portfolio.”

Like with different all-hands conferences, Google executives took questions from the corporate’s inner discussion board referred to as Dory. Staff can publish questions there, they usually bubble as much as the highest when their co-workers give them an upvote.

For Monday’s assembly, a number of the top-rated questions needed to do with the method and communication across the layoffs. One remark stated that staff are “enjoying a recreation of ping-and-hope-to-hear-back to determine who misplaced their job. Are you able to converse to the communication technique?”

Rick Osterloh, senior vp of gadgets and companies, stated the corporate “intentionally didn’t share out of respect for folks’s privateness.”

“We all know this may be irritating for people who find themselves nonetheless right here,” Osterloh stated. “However dropping your job with none alternative in it is rather tough and it’s very private and many individuals don’t need their names to be on a listing that’s distributed to everybody.”

Waiting for A.I.

One other commenter on Dory wrote, “We severed entry for 12k staff with out the prospect to carry out data transfers and even allow them to say goodbye to their colleagues. That is what we do to individuals who get fired.”

Then got here the query: “What’s the message for these of us who’re left?”

Royal Hansen, vp of safety at Google, chimed in to explain “an uncommon set of dangers that frankly we’re not that nicely practiced at managing.” He stated there have been “trade-offs.”

“When you concentrate on our customers and the way vital they’ve turn into in folks’s lives — all of the services and products, the delicate information they’ve trusted us with — although it may need been a really low chance, we needed to plan for the chance that one thing may go terribly improper,” Hansen stated. “The best choice was to shut company entry the way in which you described,” he stated, referring to the abrupt shutdown.

In response to a query asking how staff who had been with the corporate for 15-plus years had been focused for cuts, Brian Glaser, vp and chief expertise and studying officer stated, “everyone knows that nobody is immune to vary in our careers.”

Pichai reminded staffers that the corporate has necessary work forward, specifically with respect to speedy progress in AI. Final month, Google staff requested executives at an all-hands meeting whether or not the AI chatbot ChatGPT represents a “missed alternative” for Google.”

Pichai stated Monday that “it is going to be an necessary yr given the speedy developments in AI,” which can have an effect throughout the corporate.

“There is a paradigm shift with AI and I believe, with the focus of expertise now we have and work we’ll do right here, might be an enormous draw and I hope it should proceed to be,” Pichai added. “We’ve got to maintain incomes it.”

He closed the city corridor by bringing the dialogue again to the subject at hand.

It is evident, Pichai stated, “how a lot you all care about your colleagues and the corporate.” He added, “I do know it should take much more time to course of this second and what you heard at present as nicely.”

WATCH: Google becoming leaner

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