Google to cut down employee services

The head of Google's finance department Ruth Porat recently said in an unusual email to the entire company that the company is taking steps to cut employee services in order to decrease costs.

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“These are big, multi-year initiatives,” Porat said in an email to his staff on Friday, titled: “Our company-wide OKR on durable savings.” Elements of this email had previously been reported by Trade Algo.

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Google has said in separate documents seen by Trade Algo that it will curtail fitness classes, staplers, and tape, as well as the replacement of laptops for employees on a more frequent basis.

It was mentioned that one of the company's important objectives for 2023 was to achieve "durable savings by enhancing velocity and efficiency," according to Porat's email. "All of the Product Areas and Functions are working towards this," she said, referring to the product areas within the company. OKR is short for objectives and key results.

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As Alphabet's Google continues to reduce costs at its most severe level in nearly two decades as a public service company, these latest cost-cutting measures coincide with its latest round of cost-cutting measures. Following record headcount growth, the company announced in January that it would be laying off 12,000 employees, approximately 6% of its workforce, in order to contend with slower sales growth following record headcount growth.

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Other ways in which cuts have been manifested are as follows. Trade Algo previously reported that the company declined to pay the remaining maternity and medical leaves for the laid-off employees.

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As Porat stated in her recent email, the layoffs were the "hardest decisions we have had to make in the past few years."

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“In order to drive technology forward, this work is of particular importance, especially in light of our recent growth, the challenging economic environment, and the incredible investment opportunities that exist in this area - particularly in AI,” Porat wrote in the email.

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The year 2008 was mentioned twice in Porat's email.

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"We've been here before," reads the email, indicating familiarity with the situation. "During the year 2008, our expenses were growing at a faster rate than our revenues. We upgraded the productivity of our machines, we decreased our real estate investments, we tightened our belt on T&E budgets, cafes, micro kitchens, and mobile phone usage, and we eliminated our hybrid vehicle subsidiary.

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"As we did in 2008, we will be using data to identify areas of spending that aren't as effective as they should be, or that don't scale at our size, to ensure that we don't waste money."

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Trade Algo received a statement from a spokesperson stating that "As we've publicly stated, a key objective of ours is to make durable savings through improved velocity and efficiency, which is the goal we seek to achieve. In order to maintain our position as responsible stewards of our resources, we are making some practical changes to ensure that we will continue to provide industry-leading perks, benefits, and amenities to our employees."

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Cutting down on desktop PCs and staplers

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Google is pausing all new laptop refreshes, desktop PC refreshes, and monitor refreshes as part of the equipment changes. The company is also planning to change the frequency with which equipment is replaced, according to internal documents that Trade Algo was able to view.

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Employees at Google who are not in engineering roles but are still in need of a new laptop will be provided with a Chromebook by default. As the name suggests, Chromebooks are laptops made by Google, which are powered by Chrome OS, a Google-based operating system.

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In comparison to previous employee benefits, such as Apple MacBooks, that used to be available to employees, this is a significant change. "There is also the added benefit of being able to prevent external compromise across all of our managed devices, according to a document about the laptop changes."

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There is no longer any possibility for an employee to expense mobile phones if one is available internally, it was also stated in the document. There will also be a requirement for employees to get director approval if they need accessories that cost more than $1,000 and aren't available inside the company.

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There is a section on the company's website called "Desktops and Workstations" that mentions that CloudTop, the company's internal virtual workstation, will be "the default desktop" for all Google employees.

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In a report published by Trade Algo in February, a company has asked its employees and partners in the cloud to share desks on alternating days and they will be switching to a workstation system based on CloudTop.

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There has also been an increase in the number of extreme cutbacks in office supplies reported by Google employees in recent weeks. In order to cut costs, staplers, and tape are no longer being provided to printing stations companywide as "a part of a cost-effective initiative," according to a separate internal facility directive, seen by Trade Algo.

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"We have been asked to remove all tape dispensers throughout the facility," a facility directive from San Francisco stated. "In case you need a stapler or tape, you can borrow them for a short time from the receptionist's desk."

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Google spokespersons confirmed that staplers and tape continue to be offered throughout the company, but did not provide further details.

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'We baked too many muffins on a Monday’

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Additionally, Google is cutting back on some of the employee services it offers.

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Our company has always set a high bar for industry-leading perks, benefits, and office amenities, and we will continue to maintain that level of excellence in the future," wrote in Porat's email. "There are, however, certain programs that must be updated to suit the modern way that Google operates."

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"Most of these are minor adjustments," stated a separate internal document provided by the company's real estate and workplace division. Google staff would be coming in five days a week, so food programs, fitness programs, massage programs, and transportation programs were supposed to be designed with that in mind.

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"Since most of us are now in the office three days a week, we have noticed that our supply/demand ratios have been out of sync: We’ve baked too many muffins on a Monday, seen GBuses run with only one passenger, and offered yoga classes on a Friday afternoon when people are more likely to be working from home,” the document stated.

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Therefore, Google is likely to shut down cafes on Mondays and Fridays and close some facilities that are “underutilized” due to hybrid schedules as a result, according to the document.

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As a part of the January layoffs carried out by the company in the United States, more than two dozen massage therapists working on-site lost their jobs.