Don't equate fun with money: Pichai tells staff in heated all-hands meet

After reporting the second consecutive quarter of weaker-than-expected earnings, Google is now finding itself in uncharted territories of cost cuts and staffers complaining about the same. Chief Executive Officer Sundar Pichai was faced with tough questions from employees related to cuts to travel and entertainment budgets, managing productivity, and potential layoffs, according to a CNBC report.

Pichai was asked at a companywide all-hands meeting last week why the company was “nickel-and-diming employees” by slashing travel and promotional products’ budgets at a time when “Google has record profits and huge cash reserves,” as it did coming out of the Covid pandemic, the report said.

“Look, I hope all of you are reading the news, externally. The fact that you know, we are being a bit more responsible through one of the toughest macroeconomic conditions underway in the past decade, I think it’s important that as a company, we pull together to get through moments like this.”

“We don’t get to choose the macroeconomic conditions always,” he said.

He talked about the vexed issue of cost cuts, and indicated Google’s culture could still be enjoyable, even if some things were taken away. “I remember when Google was small and scrappy. “Fun didn’t always — we shouldn’t always equate fun with money. I think you can walk into a hard-working start-up and people may be having fun and it shouldn’t always equate to money.”

Google is not alone. The entire tech industry is facing some of its biggest challenges ranging from a potential recession, soaring inflation, rising interest rates and tempered ad spending. Companies that, for the past decade-plus, have been known for high growth and an abundance of fun perks, are seeing what it’s like on the other side. Towards the end of the meeting, Pichai addressed a question about why the company has shifted from “rapidly hiring and spending to equally aggressive cost saving,” the report added.

Pichai disagreed with the characterisation. “I’m a bit concerned that you think what we’ve done is what you would define as aggressive cost saving. I think it’s important we don’t get disconnected. 

You need to take a long-term view through conditions like this.” He said the firm was “still investing in long-term projects like quantum computing,” and said that at times of uncertainty, it’s important “to be smart, to be frugal, to be scrappy, to be more efficient.”

Google launched an effort in July called “Simplicity Sprint,” which aimed to solicit ideas from its more than 174,000 employees on how to “get to better results faster” and “eliminate waste.” Earlier this month, Pichai said he hoped to make the company 20 per cent more productive while slowing hiring and investments.

“I think you could be a 20-person team or a 100-person team, we are going to be constrained in our growth in a looking-ahead basis,” Pichai said. “Maybe you were planning on hiring six more people but maybe you are going to have to do with four and how are you going to make that happen?