Google Implements Employee Service Cuts to Achieve Durable Savings
Google has announced in a recent company-wide email that it is implementing cuts to employee services as part of its “company-wide OKR on durable savings”. The goal for 2023 is to achieve durable savings through improved velocity and efficiency. As such, Google is cutting back on fitness classes, staplers, tape, and the frequency of laptop replacements for employees.
The email, titled “Our company-wide OKR on durable savings”, emphasizes that these cost-cutting measures are multi-year efforts, and all product areas (PAs) and functions are working together towards achieving these objectives.
The layoffs that Google recently implemented, which eliminated 12,000 jobs representing about 6% of its workforce, are also referred to in the email as “the hardest decisions we’ve had to make as a company”.
Google’s CFO, Ruth Porat, referred to 2008 twice in her email, explaining that Google was in a similar position then, where expenses were growing faster than revenue. Porat stated that the company will be looking at data to identify areas of spending that are not as effective or that do not scale at Google’s size, just as it did in 2008.
Google is also pausing refreshes for laptops, desktop PCs, and monitors. Employees who require a new laptop but are not in engineering roles will receive a Chromebook by default. Google is cutting down on equipment replacements, changing how often equipment is replaced, and offering Chromebooks as an alternative to other laptops such as Apple MacBooks.
Furthermore, Google is reducing some availability of employee services, as many of these programs were designed for when employees came to work five days a week. Now that most Google employees work three days a week, supply and demand ratios are a bit out of sync. For example, the company has baked too many muffins on a Monday, seen GBuses run with just one passenger, and offered yoga classes on a Friday afternoon when most people are likely working from home. To rectify this, Google may close cafes on Mondays and Fridays and shut down some facilities that are “underutilized” due to hybrid schedules.
Google has faced one of its most severe periods of cost-cutting in its almost two decades as a public company. As such, the company is making these changes to remain responsible stewards of its resources while continuing to offer industry-leading perks, benefits, and amenities.
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