December 25, 2024

Alphabet CEO Sundar Pichai at the Google I/O developer conference on May 10, 2023 in Mountain View, California.

David Paul Morris | David Paul Morris Bloomberg | Getty Images

letter Executives dressed in Halloween costumes faced questions from concerned employees during Wednesday’s all-hands meeting, following comments on the company’s earnings call that hinted at further cost cuts to come.

“This is reality,” Google vice president of recruiting Brian Ong said, according to minutes of the meeting reviewed by CNBC. “We’re hiring fewer people than we were a few years ago.”

Ong, who specifically responded to questions about retention and advancement opportunities, added that there are fewer openings and hiring geographies have changed, “so you may find that there are fewer positions available where you are.”

A Google spokesman declined to comment.

The meeting comes after Alphabet reported better-than-expected third-quarter profit and revenue on Tuesday, sparking a rally in the stock. Chief Financial Officer Anat Ashkenazi, who recently succeeded Ruth Porat, declared on a conference call with investors that she wanted to achieve “more success” in cost savings across the company. further”.

Google chief scientist Jeff Dean attended the meeting wearing a starfish costume, while Ashkenazi wore a jersey belonging to former Indiana Pacers star Reggie Miller. CEO Sundar Pichai wore a black T-shirt that read “ERROR 404 COSTUME NOT FOUND” and featured an image of a pixelated dinosaur.

Ashkenazi said one of her top priorities in her new role will be further cutting spending as Google expands spending on artificial intelligence infrastructure through 2025.

This theme began in 2023, when the economy and markets shifted, and continues today. Google has been restructuring its workforce to move faster in an artificial intelligence arms race that has the company facing growing competition. As CNBC previously reported, this includes layoffs, organizational restructuring, and a “demoralization” experienced by employees.

Over the past few months, Google has made layoffs across its Silicon Valley-based marketing, cloud and security teams, as well as its trust and safety group.

Google isn’t alone. Dropbox announced this week that it would lay off 20% of its global workforce, while Amazon continues to shutter various projects. Employees within Google have expressed concern that the company is preparing for the possibility of more layoffs after the end of the year, according to internal letters seen by CNBC.

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Pichai joked that the quarterly conference call is perfect preparation for Ashkenazis before company meetings.

“I told Anat yesterday that the earnings call was a piece of cake compared to TGIF the next day,” Pichai said, eliciting laughter from attendees.

Some of the employee comments and questions included praise for “another great quarter,” the success of chip advancements and improvements to NotebookLM, Google’s popular artificial intelligence note-taking tool. However, other questions expressed concerns about what greater cost efficiencies would mean for the workforce.

“What does the comment about further improving employee efficiency actually mean”? A question was asked pointing to Ashkenazy’s comments on the conference call.

Ashkenazy gave no further details but said employees were “one of the most important assets we have.” She said the company is investing in talent, recruiting 1,000 recent graduates in the third quarter.

‘Extraordinary times for capital spending’

Pichai, who has preached efficiency for the past two years, echoed past sentiments.

“If you have to do something new and it takes 10 people, if you can find a way to do it with 8 people by making smart trade-offs somewhere and better coordinating the team, It’s also an example of improving employee efficiency,” Pichai said.

In response to another question about the ongoing layoffs and restructuring and what might happen in the future, Pichai said: “If we were to make a company-wide decision, we would certainly let you know.”

He said the company is currently investing heavily in artificial intelligence, but the need to increase those spending won’t last forever.

“We’re going through an extraordinary period of capital expenditure growth,” Pichai said. “When you do these technology shifts in the early stages, you invest disproportionately and then the curve gets better, and that’s what we’re going through. industry transformation.”

He added that not all layoffs were decided by senior executives.

“Not all of these decisions are done centrally at the company level,” he said. “So, given the size of our company, there may be times when a small number of people are affected.”

Ashkenazi mentioned Tuesday that one way to improve cost efficiency is to use artificial intelligence internally. The company says that 25% of new code is now generated by artificial intelligence.

In response to a question about productivity, Brian Saluzzo, head of “core” developers, said that while 25% refers to low-level tasks, leadership is “expanding into more complex areas” within the company.

“Core” refers to the team that builds the technical foundation for Google’s flagship products. In May, CNBC reported that Google More than 200 employees from the core engineering team were laid off as part of the restructuring, which included the rehiring of some positions in India and Mexico.

Pichai continued: “In this moment of transition, across all functions and everywhere in the company, we are challenged to think about where we can use artificial intelligence to improve productivity.”

By 2025, employees should “strive to do more” and “help customers around the world learn these lessons,” he added.

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