Google's Pichai tells underlings exec bonuses will be clipped

Staff in Q&A session yesterday to discuss 12,000 job cuts

Google's top brass told employees at a town hall meeting that executive bonuses will be cut this year as upper management addressed wide-ranging questions from staff following confirmation of extensive job cuts.

The gathering came days after Google outlined plans to lay off 12,000 workers, having recruited rapidly during the pandemic to grow headcount from 120,000 in early 2020 to almost 187,000 by the end of September.

Sundar Pichai, Alphabet and Google CEO, said last week it had hired for a "different economic reality than the one we face today." At yesterday's town hall meeting, he was reportedly contrite about the redundancy action but also defended his position.

2021, according to the boss, was "one of the strongest years we've ever had in the history of the company." He added: "In that context, we made a set of decisions that might have been right if the trends had continued. You have to remember if the trend has continued and we had not hired to keep pace, we would fall behind in many areas as a company."

Alphabet – Google's parent – grew revenue by 41 percent year-on-year in 2021 to $257.63 billion and recorded net profit of $76 billion, up from $40.26 billion in the prior year. In the nine calendar months ended September, turnover growth slowed to around 13 percent to $206.78 billion and net profit shrunk 16 percent to $46.34 billion.

These are still figures that many in the tech industry, which have seen their star fade in the past decade, would dearly love to report.

The impact on executives? Pichai said Google will reduce compensation but he didn't put much meat on the bones in terms of the plan. "The more senior you are, the more your compensation is tied to performance. You can reduce your equity grants if performance is not great."

This sounds like normal corporate dealings. We have asked Google to comment.

Staff attending the town hall wanted Google to share details of the selection criteria for why certain people were chosen for redundancy. Pichai said he'd spoken to founders Sergey Brin and Larry Page, along with the board of directors and 750 managers, to expedite decision-making. Google has an eye-watering 30,000 managers.

Skills, time in situ, along with productivity scores including sales quota and performance track record were among the areas considered.

The vast majority of Google's business is still generated from digital ads and searches, but the Cloud Platform is working hard to compete with larger rivals Microsoft and Amazon Web Services. Here, unit boss Thomas Kurian said it is hiring for engineering teams in "much more targeted areas where we need to fill out our product portfolio."

The job cuts were applied across the megacorp, including 16 percent of the Fuchsia team reportedly getting the bullet, along with folk in the datacenter maintenance team, product designers and user experience researchers, according to the New York Times. The Other Bets portion of Google has also come under the spotlight for investing in innovations that have yet to show a sustained return in terms of profit, notably Waymo.

Pichai said last week the redundancy followed a review of all product areas, one that had been called for by an institutional investor in November, who claimed Google had become bloated, was not as productive as it should be, and paid staff too much.

Parul Koul, executive chair of Alphabet Workers Union-CWA, said of the job cuts at Google: "This is egregious and unacceptable behavior by a company that made $17 billion dollars in profit last quarter alone. Workers have never been able to rely on Alphabet for secure employment — evidenced by the vast subcontracted workforce — but it is increasingly clear that tech workers must organize at a massive scale to force employers to directly bargain with workers in order to protect our jobs."

The union now has 1,100 members working at Alphabet. "We have a long road ahead of us before we reach the majority required to bring Alphabet to the bargaining table," she added.

So far in January, more than 170 tech businesses have laid off in excess of 56,000 people, according to Layoffs.fyi. Microsoft, Amazon, Salesfore, Intel and others are among them. ®

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