Google on Path of Multi-Year Saving by Cutting Employee Services and Other Goodies

UTC by Bhushan Akolkar · 3 min read
Google on Path of Multi-Year Saving by Cutting Employee Services and Other Goodies
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Google’s chief of finance referred to the 2008 times when the expenses were growing faster than the revenue, and thus they have decided on an internal rejig in that regard.

Big-tech companies across the globe have been cutting additional costs amid the tightening macro environment. Ruth Porat, Google finance chief, said in a companywide email that the company is making cuts to employee services. In a Friday email titled “Our company-wide OKR on durable savings,” Porat said that these are multi-year efforts. Furthermore, the tech giant is willing to cut down on all the additional goodies offered to employees such as fitness classes, tape, staplers, as well as the frequency of laptop replacements for employees.

Porat added that one of the major objectives for Google in 2023 is to “deliver durable savings through improved velocity and efficiency. All PAs and Functions are working toward this,” she added.

As said, Google has been on a major cost-cutting spree while initiating one of the largest cost-cutting measures in over two decades. Earlier this year in January 2023, Google said that it was eliminating 12,000 jobs, which is 6% of its workforce.

In her email, Porat said that the layoffs were “the hardest decisions we’ve had to make as a company”. She further added:

“This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward – particularly in AI”.

She also referred to the 2008 financial crisis twice in her emails. She added:

“Back in 2008, our expenses were growing faster than our revenue. We improved machine utilization, narrowed our real estate investments, tightened our belt on T&E budgets, cafes, micro kitchens and mobile phone usage, and removed the hybrid vehicle subsidiary. Just as we did in 2008, we’ll be looking at data to identify other areas of spending that aren’t as effective as they should be, or that don’t scale at our size.”

Cutting Down on Desktop PCs

As per the internal documents viewed by CNBC, Google is pausing fresh refreshes for desktop PCs, laptops, and monitors. It’s also changing the frequency of replacing old devices.

Google employees that are not in engineering roles shall receive Chromebooks instead of Apple MacBooks. Chromebooks are Google-made laptops that come with Google’s own operating system Chrome OS.

In a statement to CNBC, a Google spokesperson said that the company’s goal is to make durable savings via improved velocity and efficiency. “As part of this, we’re making some practical changes to help us remain, responsible stewards of our resources while continuing to offer industry-leading perks, benefits, and amenities,” said the spokesperson.

Similarly, employees won’t be able to demand gadgets from the outside, if they are available internally. In case they need any gadget costing above $1,000 they would need director “or above” approval.

“These are mostly minor adjustments. We set a high bar for industry-leading perks, benefits and office amenities, and we will continue that into the future. However, some programs need to evolve for how Google works today,” added Porat.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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