Google CEO Defends Job Cuts as Staff Seek Process Clarity

Delfrina Yasmine . January 26, 2023

Picture: CNBC

Techspace - During a town hall meeting on Monday, officials defended the job losses and heard questions from a concerned staff, just days after Google revealed the biggest round of layoffs in the company's 25-year history.

Sundar Pichai, CEO of Google, led the companywide meeting and informed staff that executive compensation will be reduced. He urged colleagues to stay engaged as Google faced more competition in areas like as artificial intelligence, while also attempting to explain why individuals who lost their jobs were abruptly removed from the internal system.

"I understand your concern about the future of your job," Pichai stated. "Also extremely sad for the loss of some truly nice colleagues across the firm. The delay in being able to make and convey choices concerning jobs in your region is likely generating concerns for those of you outside the United States."

CNBC listened to the audio of the discussion, which came after the firm said Friday that it would be laying off 12,000 people, or around 6% of its full-time employees. While employees were prepared for a possible layoff, they wanted to know what criteria were utilized to determine who stayed and who went. Some of the laid-off employees had been with the company for a long time and had lately been promoted.

Pichai began Monday's town hall meeting by referring to the Lunar New Year mass shooting in Southern California on Saturday night, which killed 11 people and injured at least nine more.

"Many of us are still dealing with the weekend violence in Los Angeles and the awful loss of life," he stated. "I know more specifics aren't out yet, but it's obviously impacted our Asian American community hard, especially during Lunar New Year, and we're all thinking about them."

‘We Have Over 30,000 Managers’

Picture: NBC

After shifting the subject to job layoffs, Pichai provided some context for how he and the executive team arrived at their judgments.

Pichai stated that he discussed the decision with the company's founders and controlling shareholders, Sergey Brin and Larry Page, as well as the board of directors.

Pichai stated that 2021 will be "one of the best years we've ever had in the history of the firm," with revenue increasing by 41%. Google raised its headcount to match the expansion, and Pichai stated that the business expects growth to continue.

"In that environment, we took a set of judgments that may or may not have been correct if the trends had persisted," he explained. "You have to bear in mind that if the trend persisted and we did not employ to stay up, we would have fallen behind in many areas as a corporation."

According to executives, 750 top officials were involved in the process, which took several weeks to select who would be put go.

"We have over 30,000 managers at Google, and consulting with all of them would have made this an open process that would have taken weeks or even months to make a decision," Fiona Cicconi, Google's top people officer, said during the meeting. "We needed assurance sooner."

Cicconi explained that executives looked at areas where the job was vital but the organization had too many workers, as well as regions where the task itself was not critical. According to Cicconi, the corporation takes into account "skill set, time in a job where expertise or contacts are useful and matter productivity indicators such as sales targets, and performance history."

Pichai stated that executive salary will be reduced but gave little details. He predicted that all senior vice presidents' yearly bonuses will be "significantly reduced" this year.

"The higher you go in the ranks, the more your pay is related to performance," he explained. "If performance is poor, you can cut equity awards."

Before the layoffs, Google had decided to pay out 80% of bonuses this month, with the remainder due in March or April. Previously, the entire incentive was paid in January.

Google Cloud CEO Thomas Kurian provided some insight into the areas that were removed. As the business strives to catch Amazon and Microsoft, Google's cloud operation has been one of the fastest-growing sectors for headcount increase.

"Our engineering recruiting is considerably more focused on areas where we need to build out a product portfolio," Kurian explained. "In every particular country and industry, we are hiring sales and customer engineers."

Kurian stated that the cloud unit's goal starting in July was to prioritize hiring "in response to generative AI throughout our portfolio."

In Terms of A.I.

Picture: Medium

Google officials, like in previous all-hands events, accepted questions from the company's internal forum called Dory. Employees may post queries there, and they will rise to the top of their coworkers and vote them up.

Some of the most frequently asked topics during Monday's meeting concerned the procedure and communication surrounding layoffs. Employees are "playing a game of ping-and-hope-to-hear-back to find out who lost their job," according to one comment. "Can you elaborate on the communication strategy?"

The business "deliberately did not disclose out of respect for people's privacy," said Rick Osterloh, senior vice president of devices and services.

"We understand how annoying this might be for those who remain," Osterloh added. "However, losing a job without a choice is very traumatic and highly personal, and many individuals don't want their names on a list that is circulated to everyone."

"We cut access for 12k workers without the ability to complete knowledge transfers or even let them say farewell to their colleagues," stated another Dory commenter. This is what we do to folks who are fired."

Then followed the question, "What is the message for those of us who are left?"

Royal Hansen, Google's vice president of security, chipped in, describing "an uncommon collection of dangers that, honestly, we're not that well versed at managing." He mentioned "trade-offs."

"When you think about our users and how important they've become in people's life — all the goods and services, the sensitive data they've trusted us with — we had to plan for the chance that things could go tragically wrong," Hansen said. "The best choice was to block corporate access in the manner you indicated," he explained, alluding to the unexpected closure.

In answer to a query about how long-term employees were targeted for layoffs, Brian Glaser, vice president, and chief personnel and learning officer, remarked, "we all know that no one is immune to change in our lives."

Pichai reminded employees that the firm has critical work ahead of it, particularly given the rapid advancement of AI. At an all-hands meeting last month, Google employees asked management if the AI chatbot ChatGPT signals a "lost opportunity" for Google.

Pichai stated on Monday that "2017 will be a significant year given the tremendous breakthroughs in AI," which will affect the entire firm.

"There's a paradigm change with AI, and I think the concentration of talent we have and the work we'll undertake here will be a significant pull, and I hope it will continue to be," Pichai said. "We must continue to earn it."

It's obvious, "How much you all care about your colleagues and the organization," Pichai added. "I realize it will take a lot more time to digest this moment and what you heard today," he said.

He ended the town hall by returning the conversation to the matter at hand.

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