Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.David Paul Morris | Bloomberg | Getty Images
On Wednesday, Google executives dressed in Halloween costumes faced a wave of questions from employees at a company-wide meeting. This followed recent remarks suggesting more cost-cutting measures are on the horizon. Alphabet, Google’s parent company, reported impressive third-quarter earnings on Tuesday, which led to a significant stock surge. However, comments from Alphabet CFO Anat Ashkenazi regarding potential cost-saving measures sparked concern among the workforce.
CEO Sundar Pichai and other top executives attended the meeting, fielding questions from employees eager for clarity on their job security and the company’s future. According to meeting recordings, the event provided a mix of levity and seriousness. Pichai wore a t-shirt reading, “ERROR 404 COSTUME NOT FOUND,” a humorous nod to the occasion, while other leaders, including CFO Ashkenazi, embraced the festive spirit with their costumes.
During the session, Brian Ong, Google’s Vice President of Recruiting, acknowledged that hiring has slowed significantly compared to previous years. He noted that hiring restrictions have impacted the number of positions and geographic locations available, adding, “You may see fewer roles available where you are.” These remarks, captured in a recording reviewed by CNBC, reflect the company’s cautious approach to expanding its workforce amidst ongoing economic uncertainties.
The news of potential cuts left many employees uneasy, especially since Alphabet has already made considerable layoffs across several departments, including marketing, security, and cloud operations, in the past few months. With this latest meeting, Google staff expressed growing anxiety that more workforce reductions may be looming, possibly before year-end.
In the earnings call, Ashkenazi highlighted her commitment to driving efficiencies, explaining that while the company invests heavily in artificial intelligence (AI) infrastructure, she remains focused on trimming excess costs wherever possible. The rising focus on AI has led to some workforce restructuring as Google aims to stay competitive in an industry seeing rapid technological advancements. Ashkenazi mentioned that as part of her strategic vision, leveraging AI internally to streamline operations could be one way to achieve efficiency gains. At present, roughly 25% of new code generated at Google is created through AI. The leadership team expressed hope that this percentage will grow, potentially easing demands on the engineering workforce.
Google’s ongoing pursuit of efficiency has been evident since 2023, as the company has grappled with a fluctuating economy and intensified competition. The internal shift toward AI, organizational adjustments, and workforce reshaping have led to morale concerns. According to an internal memo reviewed by CNBC, employees have reported a decline in workplace morale as the company pursues what some see as aggressive cost-cutting strategies.
Several employees asked leaders for clarification regarding remarks about further “efficiencies in headcount.” One employee, who spoke during the session, sought to understand if recent comments hinted at more layoffs. Ashkenazi responded by emphasizing the company’s dedication to retaining its workforce, pointing out that over 1,000 new graduates were hired in the third quarter alone. Pichai also stepped in to clarify that the push for efficiency doesn’t always mean workforce reductions; in some cases, it’s about aligning teams or finding ways to accomplish tasks with fewer resources.
For employees feeling the pressures of these changes, Pichai’s response offered limited reassurance. He mentioned that while some decisions are driven by top leadership, not all are centralized. In a company as vast as Alphabet, he explained, some reorganizations could be minor or isolated to specific teams rather than broad, company-wide changes. Nonetheless, the message on job security remains mixed for employees who sense that uncertainty is part of Google’s current phase of adaptation.
In recent months, Google has adjusted hiring to focus on filling roles in specific regions, reflecting a trend toward a more geographically diverse workforce. For example, reassignments and new hires have moved some roles to international markets such as India and Mexico. This restructuring has allowed the company to maintain productivity levels while reining in expenses.
While addressing these transformations, Pichai highlighted Google’s focus on AI expansion as a driver of increased capital expenditures (capex). He explained that significant investments are typical during periods of technological shifts and that, over time, these expenses tend to level off. “We are going through an extraordinary period of capex advancement,” he said, emphasizing that strategic investments are essential for long-term growth. Still, he noted that Google’s leadership would continue examining areas where efficiencies could be achieved without compromising the company’s overall objectives.
Despite concerns, Pichai and other leaders expressed optimism for Google’s future, underpinned by AI innovation. He encouraged employees to find ways to increase productivity across the board, including exploring AI tools to assist customers in using Google’s technology more effectively.
The all-hands meeting underscored the balance Google leaders are trying to strike between managing costs and sustaining an innovative, resilient workforce. For employees, however, the overarching message about “efficiency” remains a potential signal of further change.
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