Google CEO Sundar Pichai speaks onstage during the annual Google I/O developer conference in Mountain View, California, May 8, 2018.
Stephen Lamb | Portal
Google is launching a new initiative called “Simplicity Sprint” to increase efficiency and improve employee focus in an uncertain economic environment.
The Alphabet company had its regular all-hands last Wednesday, and the tone was somewhat urgent as employees expressed concerns about layoffs and CEO Sundar Pichai asked employees for input, according to attendees and related internal documentation obtained by CNBC was viewed. Google’s productivity as a company is not where it should be, even with the number of employees it has, Google CEO Sundar Pichai told employees at the meeting.
“I wanted to provide some additional context following our earnings results and also ask for your help,” Pichai opened up, referring to the company’s second-quarter earnings report on Tuesday. “It is clear that we face a challenging macro environment with even greater uncertainty.”
He added, “There’s real concern that our overall productivity isn’t where it should be for the number of employees we have.” He called on employees to help “create a culture that is more aligned with our mission, our products and more customer oriented. We should think about how we can minimize distractions and really raise the bar for product quality and productivity.”
It comes after the company on Tuesday reported its second straight quarter of weaker-than-expected earnings and revenue. Revenue growth slowed to 13% in the quarter from 62% a year earlier, as the company benefited from the post-pandemic reopening and consumer spending increased. CFO Ruth Porat said she expects some of the challenges to persist in the short term, but the company isn’t providing any formal guidance.
It also comes after Pichai recently said it would slow the pace of hiring and investment through 2023, urging employees to work “with greater urgency” and “more hunger” than “on sunnier days.”
“Simplicity Sprint”
“I would love to enlist all your help,” Pichai said Wednesday at the all-hands meeting in front of his more than 170,000 full-time employees.
To this end, Pichai launched a “Simplicity Sprint” initiative to collect ideas for faster product development. “Sprint” is a term commonly used in software development and tech startups to describe short, focused steps towards a common goal.
Pichai said the company is opening up the opportunity for employees to share their ideas by Aug. 15 through an internal poll asking if management can be reached if they have follow-up questions.
It’s a bid for the company to “get better results, faster,” Pichai said during the meeting. The poll, viewed by CNBC, shows that it can also be used to save in specific areas.
Questions in the survey include, “What would help you work more clearly and efficiently to serve our users and customers?” Where should we remove speed limits to get better results faster? How do we eliminate waste and stay entrepreneurial and focused as we grow?”
The request also comes as the company seeks to defuse tensions between employees and managers after an annual “Googlegeist” poll found employees gave the company particularly low marks on pay, promotions and execution.
Highlighting a 7% drop in views on Google’s execution, then-CEO Prabhakar Raghavan wrote, “It means we need to pay more attention to bureaucracy-crushing.” oversees search, display, mapping, and other areas.
In May, the company announced it would revise its performance appraisal process, which will result in higher salaries while it hopes to reduce bureaucracy around compensation and raises.
“Slightly Scared”
In Wednesday’s all-hands session, executives addressed employee concerns about potential layoffs. One of the top-rated questions was, “Given Sundar’s statement that increasing Google’s focus means consolidating where investments overlap and streamlining processes, should we expect layoffs?”
Pichai referred the question to Google’s chief people officer, Fiona Cicconi.
While Cicconi said the company is still hiring and has no plans for layoffs at this time, she didn’t rule it out.
“We’re challenging teams to be more focused and efficient, and we’re also working on what that means as a company. While we cannot be certain of the future economics, we have no plans to reduce Google’s overall workforce at this time.”
She also said, “I really understand that there is some concern about this based on what we’re hearing from other companies and what they’re doing, and as Sundar mentioned, we’re still hiring for key positions,” Cicconi said. She asked employees to remember that this is still the highest hiring year in the company’s history.
In the second quarter, Alphabet said its headcount grew 21% to 174,014 full-time equivalents, from 144,056 a year earlier. However, the company said last month it would slow the pace of hiring and investment through 2023, and CEO Sundar Pichai told employees in a memo, “We are not immune to economic headwinds.”
Pichai pointed out the broader economic headwinds several times. “If you look at what’s happening externally – I’m sure you’re all reading the news – people in companies using Google products are facing their own challenges right now.”