Google employees brace for cost cuts as anxiety mounts

Google employees in Switzerland sent a letter this month to the company’s vice president of human resources, outlining their concerns that a new employee evaluation system could be used to eliminate labor- work.

“The number and spread of reports that have reached us indicate that at least some managers have been aggressively pressured to enforce a quota” on a process that could lead to employees receiving negative ratings and potentially losing their jobs, five workers and employee representatives wrote in the letter. , which was obtained by The New York Times.

The letter outlined how some Google employees increasingly interpreted recent management decisions as warnings that the company might be considering larger layoffs. From the impending closure of a small office and the cancellation of a content moderation project to various efforts to ease budgets during 2023 planning meetings, the Silicon Valley giant has become a powder keg of anxiety, according to interviews with 14 current and former employees, who spoke on condition of anonymity for fear of reprisal.

In some cases, Google employees have responded to a program the company launched in July to streamline operations, cut red tape and make themselves more productive. In other cases, they’ve had budget conversations, with some teams unable to hire more next year, the people said. And workers also worried about decisions made months ago that for some have taken on new meaning, they said.

Concerns grew as Google’s tech industry peers handed out pink slips amid a waning global economy. Last month, Meta, the owner of Facebook and Instagram, purged its ranks of 11,000, or about 13% of its workforce. Amazon also began laying off about 10,000 people in corporate and tech jobs, or about 3% of its employees.

Even Google, which is on track to make tens of billions of dollars in profits this year, has had to contend with a downturn. In October, as the digital advertising market plummeted, Google’s parent company Alphabet announced that its third-quarter profits fell 27% from a year earlier to $13.9 billion. of dollars.

Google did not comment on employee anxiety in response to a request from The Times. Sundar Pichai, chief executive, said in October that the company would “focus on a clear set of product and business priorities.” He also said it would slow hiring and “moderate” his spending growth.

Unlike other big tech companies, Google has so far avoided large-scale job cuts. Still, investors have been pushing the company to become more aggressive in “defending” its huge earnings, said Evercore ISI analyst Mark Mahaney.

“One of the most obvious ways to do this is to reduce costs and reduce the number of employees,” he said. He added that it was “a little strange” that Google’s parent company hired 30,000 employees in the past three quarters, given economic trends. At the end of September, Alphabet had 186,779 workers.

In recent months, Google has seemed to pay more attention to cost. In July, it launched the operations streamlining program. Shortly after, it canceled some projects, including the Pixelbook laptop and Stadia, its streaming platform for video games. It also cut funding for Area 120, an in-house product incubator.

At a recent meeting, a Google human resources representative told a worker that the company would re-examine the possibility of broader layoffs in the new year and that it was Mr Pichai’s decision, according to a audio recording obtained by The Times.

Google has told other employees it will prioritize cutting property spending, travel costs and benefits before making layoffs, said a person familiar with the conversations, who spoke on the guise of anonymity because the conversations were private. The company plans to close a small office in Farmington Hills, Michigan, a suburb of Detroit, next month.

Project cancellations and reorganizations have stoked nervousness. In September, Google’s YouTube shut down a project based in the Farmington Hills office with nearly 80 employees, laying off some staff who hadn’t found new roles at the company, four people with knowledge of the incident said. decision. YouTube had hired them as contractors to moderate content on the video platform. Google said 14 workers lost their jobs.

Google said that through these types of reorganizations, it was not looking to reduce the size of its overall workforce, but that some teams might eliminate roles as the company reevaluates its priorities.

Some teams that have grown consistently in the past won’t be able to hire more people next year, four people familiar with the situation said. There are also higher demands for planning for 2023, such as having a manager write plans for how to handle 10 different budget scenarios instead of three or four, one person said. During planning discussions, executives pressed managers to justify their spending, asking if there were any workarounds or team reorganizations that could save money, two people said.

A major concern for some employees was whether Google could use its new performance appraisal system to speed up job cuts. In May, the company installed the new system, called Googler Reviews and Development.

Under the system, officials expect the bottom 2% of employees to be classified as having “not enough impact,” according to two people familiar with the matter. Another 4% should be judged as having a “moderate impact”.

Concerns have intensified that the bottom 6%, or around 11,000 people, could be targeted for layoff, according to four people, and as previously reported by tech news site The Information.

The GRAD system means that Google now has two categories of employees considered low performers, compared to one under the old program, which could lead to a larger pool of workers at the bottom. The system also had a bumpy rollout, with managers and employees unsure how it should work, according to the letter and four employees.

Google said it expects workers to become more comfortable with the system over time. He added that he had a no surprises policy, meaning employees would know well in advance if they were underperforming.

Before handing out the two lowest ratings, managers are also expected to inform employees during “attendance check” meetings. Google said not all of these meetings will lead to a lower rating, with support check-ins also being held for those who need extra help with their obligations.

Employees would also have guidance if their manager wanted to put them on a “performance improvement” plan, the company said, a process that requires workers to improve their work within 60 days to keep their jobs. Google gave employees the choice of staying on a performance enhancement plan or resigning with a buyout package.

Google said it hasn’t made changes to increase the number of performance plans and has offered these types of starting options for years.

This month’s letter from some Google employees in Switzerland to Fiona Cicconi, vice president of human resources, was spearheaded by members of a 15-person employee representation committee, ER-CH.

One of their main concerns was that, contrary to what some Google executives have said, the company might have a quota for the number of employees who were supposed to have support recordings, and whose jobs could therefore be vulnerable.

Google said it did not impose a quota on support records. But while hardly anyone used those meetings after the GRAD system was implemented, he said, he asked leaders to convey the importance of meetings to managers.

Signatories to the memo in Switzerland also said there was confusion among both managers and workers about who qualified for a support recording. They urged Ms Cicconi to put safeguards in place so the system does not lead to mass layoffs.

“It’s normal that new processes don’t work well at first, but that shouldn’t come at the expense of Googlers’ well-being, careers, and compensation,” they wrote.