Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet executives, donning Halloween costumes, faced questions from concerned employees at an all-hands meeting on Wednesday, following comments on the company’s earnings call suggesting that more cost cuts are coming.
“There is a reality to it,” said Brian Ong, vice president of Google recruiting, according to a recording of the meeting reviewed by CNBC. “We are hiring less than we did a couple of years ago.”
Ong, who was specifically responding to a question about retention and promotion opportunities, added that fewer positions are open and geographic hiring has changed, “so you may see fewer roles available where you are.”
A Google spokesperson declined to comment.
The meeting came after Alphabet reported better-than-expected third-quarter earnings and revenue Tuesday, sparking a rally in the stock. On a call with investors, CFO Anat Ashkenazi, who recently succeeded Ruth Porat, proclaimed she wanted to “push a little further” with cost savings across the company.
Google’s chief scientist, Jeff Dean, wore a starfish costume to the meeting, while Ashkenazi sported a jersey of former Indiana Pacers star Reggie Miller. CEO Sundar Pichai wore a black t-shirt that read “ERROR 404 COSTUME NOT FOUND” with an image of a pixelated dinosaur.
Ashkenazi said one of her key priorities in the new role would be to make more cuts as Google expands its spending on artificial intelligence infrastructure in 2025.
It’s a theme that began in 2023, when the economy and market turned, and has continued since. Google has been restructuring its workforce to move more quickly in the AI arms race, where it faces increased competition. That’s included layoffs, organizational shake-ups, and has led to workers feeling a “decline in morale,” as CNBC previously reported.
Over the last couple of months, Google has made cuts to its marketing, cloud and security teams in Silicon Valley, as well as in its trust and safety unit.
Google is far from alone. Dropbox this week announced it will lay off 20% of its global workforce, while Amazon continues shuttering various projects. Within Google, employees have expressed concern that the company is preparing for more layoffs, possibly after the end of the year, according to internal correspondence viewed by CNBC.
Pichai joked that the quarterly call was perfect preparation for Ashkenazi ahead of the company meeting.
“I was telling Anat yesterday, earnings calls are a piece of cake compared to TGIF the next day,” Pichai said, to laughs from attendees.
Some employee comments and questions included praise for “another great quarter,” success in chip advancements and improvements in Google’s hit AI note-taking tool NotebookLM. However, other questions expressed fear of what greater cost efficiencies would mean for the workforce.
“What exactly was meant by the comments on further efficiencies in headcount”? one question asked, pointing to Ashkenazi’s comments from the call.
Ashkenazi didn’t share any more details but said employees are “one of the most important assets we have.” She said that the company is investing in people and that it hired 1,000 new graduates in the third quarter.
‘Extraordinary period of capex advancement’
Pichai, who’s been preaching efficiency for almost two years, chimed in to echo past sentiment.
“If you have to do something new and it’s going to take 10 people, if you can find a way to do it with eight people by making smart trade-offs somewhere and aligning teams better, that’s an example of finding efficiencies in headcount as well,” Pichai said.
In response to another question about ongoing layoffs and reorganizations and what might be coming in the future, Pichai said, “If we are making companywide decisions, we’ll definitely let you know.”
He said the company is spending heavily on AI at the moment, but the need to ramp up those expenses won’t last forever.
“We are going through an extraordinary period of capex advancement,” Pichai said. “When you have these technology shifts, at the earlier stages, you invest disproportionately and then the curve gets better and that’s the transition as an industry we are working through.”
He added that not all of the cuts are decided on by top executives.
“It’s not like all of these decisions are centrally done at a company level,” he said. “And so, at the scale of our company, there could be moments where there are small groups of people impacted.”
Ashkenazi on Tuesday mentioned that one way to get more cost efficiency is by using AI internally. The company said 25% of new code is now generated by AI.
In response to a question about productivity, Brian Saluzzo, head of “Core” developers, said that while the 25% refers to low-level tasks, leadership is in the midst of “expanding to more complex areas” within the company.
“Core” refers to the teams that build the technical foundation underlying Google’s flagship products. In May, CNBC reported that Google laid off more than 200 employees from its Core engineering teams, in a reorganization that included rehiring some roles in India and Mexico.
Pichai followed up by saying, “In this transition moment, across all functions, everywhere in the company, it’s worth challenging us to think where we can use AI to be more productive.”
He added that through 2025, the workforce should “strive to do more” and “help customers around the world take those learnings as well.”
