Google CEO defends job cuts in bustling town hall as employees demand clarity on process

Days after Google announced the largest round of layoffs in the company’s 25-year history, executives defended the job cuts and answered questions from a worried workforce at a town hall meeting on Monday .

Google CEO Sundar Pichai led the company-wide meeting and told employees that executives would see their bonuses reduced. He pleaded with employees to stay motivated as Google faces increased competition in areas such as artificial intelligence, while trying to explain why employees who lost their jobs were removed from the internal system without warning.

“I understand that you are worried about the continuation of your work,” Pichai said. “Also very sad for the loss of great colleagues throughout the company. For those of you outside of the United States, the delay in being able to make and communicate decisions about roles in your region is undoubtedly a source of of anxiety.”

CNBC listened to audio from the meeting, which followed the company’s announcement Friday that it is cutting 12,000 jobs, or about 6% of the full-time workforce. As employees prepared for a possible layoff, they wanted answers regarding the criteria used to determine who would stay and who would leave. Some of the terminated staff had long tenures and have recently been promoted.

Pichai opened Monday’s town hall meeting by acknowledging the Lunar New Year mass shooting in Southern California on Saturday night that killed 11 people and injured at least nine others.

“Many of us are still dealing with the violence in Los Angeles this weekend and the tragic loss of life,” Pichai said. , especially at the time of the Lunar New Year and we all think of them.

After shifting the conversation to the job cuts, Pichai explained how he and the management team made their decisions.

Pichai said it consulted with founders and majority shareholders Sergey Brin and Larry Page as well as the board of directors.

Pichai said 2021 marked “one of the strongest years we’ve ever had in company history,” with revenue growing 41%. Google has increased its workforce to match this expansion, and Pichai said the company assumes the growth will persist.

“Against this backdrop, we made a set of decisions that could have been good if the trends continued,” he said. “You have to remember that if the trend had continued and we hadn’t hired to keep up, we would have fallen behind in many areas as a business.”

The executives said 750 senior executives were involved in the process, adding that it took a few weeks to determine who would be fired.

“We have over 30,000 managers at Google and consulting them all would have made this an open process where it would have taken weeks or even months more to come to a decision,” said Fiona Cicconi, Google’s chief human resources officer. , to “We wanted to have certainties sooner.”

Regarding the reduction criteria, Cicconi said executives looked at areas where work was needed, but the company had too many people as well as places where the work itself was not critical. Cicconi said the company considered “skillsets, time spent in a role where experience or relationships are relevant and important, productivity metrics such as sales quotas and performance”.

Pichai said there would be executive pay cuts, but provided limited details. He said all senior vice presidents “will see a very significant reduction in their annual bonus” this year.

“The more senior you are, the more your pay is tied to performance,” he said. “You can reduce your equity grants if the performance is not great.”

Prior to the job cuts, Google had made the decision to pay out 80% of the bonuses this month, with the rest expected in March or April. In previous years, the entire bonus was paid in January.

Thomas Kurian, CEO of Google Cloud, offered a perspective on the areas that have suffered cuts. Google’s cloud unit has been one of the fastest growing areas for workforce expansion as the company tries to catch up Amazon and Microsoft.

“Our engineering hiring is much more targeted in areas where we need to complete a product portfolio,” Kurian said. “We are adding sales and customer engineers in very specific countries and industries.”

Kurian said that starting in July, the cloud unit’s goal was to focus hiring “in response to generative AI across our portfolio.”

As with other bare-knuckle meetings, Google executives answered questions from the company’s internal forum called Dory. Employees can ask questions there, and they rise to the top when their colleagues give them an upvote.

For Monday’s meeting, some of the top-rated questions were about process and communication around layoffs. One comment said employees are “playing a game of ping and hope to hear back to find out who lost their job. Can you talk about the communications strategy?”

Rick Osterloh, senior vice president of devices and services, said the company “deliberately did not share out of respect for people’s privacy.”

“We know it can be frustrating for people who are still here,” Osterloh said. “But losing your job without any choice is very difficult and it’s very personal and a lot of people don’t want their name on a list that is distributed to everyone.”

Another Dory commenter wrote: “We have cut off access to 12,000 employees without the ability to perform knowledge transfers or even let them say goodbye to their colleagues. That’s what we do to people who get fired.

Then came the question, “What is the message for those of us who remain?”

Royal Hansen, vice president of security at Google, chimed in to describe “an unusual set of risks that, frankly, we’re not very trained to deal with.” He said there were “compromises”.

“When you think about our users and how critical they have become in people’s lives – all the products and services, the sensitive data they entrusted to us – even though it might have been very unlikely, we had to plan for the possibility of something going terribly wrong,” Hansen said. “The best option was to shut down business access as you described,” he said, referring to the abrupt shutdown. .

In response to a question asking how employees who had worked for the company for more than 15 years were being targeted for the cuts, Brian Glaser, vice president and director of talent and learning, said, “We all know that no one is immune to change in our careers.”

Pichai reminded employees that the company has important work to do, especially when it comes to rapid progress in AI. Last month, Google employees asked executives at a town hall meeting if the AI ​​chatbot ChatGPT represented a “missed opportunity” for Google.

Pichai said Monday that “this will be an important year given the rapid advancements in AI,” which will impact the entire business.

“There is a paradigm shift with AI and I think with the concentration of talent that we have and the work that we will do here, it will be a big draw and hopefully that will continue,” Pichai added. . “We have to keep winning it.”

He closed the town hall by bringing the discussion on the subject back to the agenda.

It’s obvious, Pichai said, “how much you all care about your colleagues and the company.” He added: “I know it will take a lot longer to process this moment and what you heard today as well.”

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