In 2004, Google Co-founders Larry Page and Sergey Brin participated in a comical, passive-aggressive IPO roadshow. They dress casually in favor of business suits, refuse to answer many questions from financial moguls, and tell investors that rather than focusing on profits, they channel their resources to “the world’s many problems.” Both founders feared regulation of publicly traded companies and vowed that Google would never follow Wall Street’s footsteps. To ensure this, the founders structured the company to own the majority of the voting rights. Instead of returning money to shareholders, Google pampered the talent who drove innovation by offering perks like in-house massages, free meals, and fancy rewards. He blew workers’ minds by announcing a 10% raise, doubling their generous annual bonus, and a $1,000 Christmas gift. The beneficiaries were already earning market-leading salaries through favorable equity. But the generosity of the founders made it clear that they meant it when employees said it was the heart of the company.
Brin and Page haven’t been deeply involved in years, but the company’s 25-year history leaves behind many unconventional legacies. Until at least this month, Google’s parent company Alphabet laid off his 12,000 employees. That was about 6% of the workforce, including many senior managers and people who had worked there since the early days. For a company notorious for pampering its employees, the layoffs were an emotional shock. Especially since some of the victims were soberly dispatched and had their email access cut off before they could say goodbye to longtime colleagues.
Alphabet isn’t the only company to lay off workers. Top executives from Meta, Microsoft, Salesforce, Amazon and others are doing the same. They deal with what they suddenly perceive as overstaffing by chopping off their heads. His current CEO Sundar’s Pichai memo was so similar to other companies’ dispatches that they all seem to have pumped the same prompt into his ChatGPT. Sorry, we were too optimistic about hiring when we were scraping dough during the pandemic, so some have to go. I am very much looking forward to the future when not everyone will participate!
But bloodshed at Alphabet is different. Aside from laying off hundreds of salespeople in 2009, the company has never experienced major layoffs. Along with that, there are also signals that the days of unlimited perks are over. (He had 27 of the company’s in-house massage therapists among those who suffered losses from the cuts.) Like all tech companies these days, growth has slowed and the stock has fallen, but Alphabet still attracts a lot of money. In its latest reported quarter, the company managed to make a profit of $14 billion. And $116 billion is in vaults. Over the past few years, the company has spent more than his $100 billion to buy back its own shares. This is what Wall Street likes, but it has no effect on the business itself.
Pichai has reasons to justify layoffs and benefits cuts. With 187,000 employees, there is no denying that thousands of jobs are not essential to the company. It may include not only massage therapists, but hundreds of middle managers who run non-essential projects. (Brin and Page always felt that middle management was slowing innovation.) As you might imagine, people working in the competitive field of AI, including the Google Brain research group, are avoiding layoffs. I was.In fact, Pichai claimed the cuts were made so Google could spend more AI resources.
But in some ways the layoffs represent what seems like a gradual shift in philosophy. For years, Alphabet has funded projects and created entire divisions dedicated to creating novel forms of technology. One of them, an internal incubator called Area 120, was essentially shut down by cutbacks this month. There was also some trimming in the X division of the alphabet working on “Moonshot”. After years of frustration on the profitability of the company’s ambitious “other bets,” Wall Street now appears to be focusing on a more tangible business.
