Google’s business is experiencing rapid growth, with a blowout earnings report that has pushed the company’s market cap past $2 trillion. However, employees are concerned about why this performance is not translating into higher pay and how long cost-cutting measures will be in place, leading to a decline in morale, distrust, and a disconnect with leadership. Despite the company’s strong financial performance, employees have not seen significant compensation increases and are questioning the company’s priorities, including investing in artificial intelligence over employee compensation.
Alphabet’s leadership has been on the defensive in recent years due to various internal issues, including post-pandemic return-to-office mandates, cloud contracts with the military, layoffs, and cost-cutting measures. CFO Ruth Porat addressed employee concerns at an all-hands meeting, acknowledging that expenses had grown faster than revenues in the past and emphasizing the importance of investing in growth. Google executives have been pushing employees to work faster and make tough choices in the current business environment.
There were many employee questions regarding Alphabet’s use of cash, particularly concerning the company’s buyback program. As of last quarter, Alphabet had over $100 billion in cash, but distributing this to shareholders is necessary to avoid finding themselves in a difficult financial position. CFO Porat stressed that buybacks and dividends do not replace investments in AI and growth opportunities. CEO Sundar Pichai highlighted the company’s transition phase, which includes cutting expenses and driving efficiencies while still investing in key priorities.
Requests for transparency and clarity were raised by employees, particularly regarding headcount strategy and cost-cutting measures. Pichai acknowledged that leadership has responsibility in addressing the decline in morale and that the company is working through a period of transition, which includes moderating the pace of expense growth and making tough decisions regarding investments. Despite ongoing layoffs and uncertainty, Pichai assured employees that the majority of layoffs would be completed in the first half of 2024, with the second half of the year expected to have fewer job cuts.
Google’s use of cash was a key topic of discussion at the all-hands meeting, with employees expressing concerns about the company’s priorities and financial decisions. Despite the company’s strong financial performance and growing expenses, leadership is focused on managing headcount growth and investments in key areas. Pichai emphasized the need for discipline in managing expenses and making strategic decisions to navigate the current business environment. While employees continue to voice their concerns, Alphabet’s leadership remains committed to investing in growth and prioritizing key initiatives for the company’s future success.
