Productivity and focus must be improved

Google CEO Sundar Pichai speaks on stage during the annual Google I/O Developer Conference in Mountain View, California, May 8, 2018.

Stephen Lamm | Reuters

Google is launching a new effort called “Simplicity Sprint” in an effort to improve efficiency and improve employee focus during an uncertain economic environment.

Alphabet had all normal hands last Wednesday, and the tone was rather compelling as employees expressed concern about layoffs and CEO Sundar Pichai asked employees for input, according to attendees and relevant internal documents seen by CNBC. Google’s productivity as a company isn’t where it should be even with the number of employees it has, Sundar Pichai, Google CEO, told employees at the meeting.

“I wanted to give some additional context after our earnings results, and ask for your help as well,” Pichai opened, referring to the company’s second-quarter earnings report on Tuesday. “It is clear that we are facing a challenging macro environment with more uncertainty going forward.”

“There are real concerns that our productivity as a whole is not where it should be in relation to our headcount,” he added. He asked employees to help “create a culture that is more mission-focused, more focused on our products, and more focused on customers. We must think about how we can reduce distractions and raise the level of product excellence and productivity.”

This comes after the company on Tuesday reported lower-than-expected profits and revenues for the second consecutive quarter. Revenue growth slowed to 13% in the quarter from 62% a year earlier, when the company was benefiting from a post-pandemic reopening and consumer spending was on the rise. Chief Financial Officer Ruth Porat said she expects some challenges to persist in the near term but the company is not providing formal guidance.

It also comes after Pichai recently announced that he would slow the pace of hiring and investments through 2023, telling employees to work with “more urgency” and “more hunger” than appears “on sunny days”.

The speed of simplicity

“I would like to have all your help,” Pichai said at an open meeting on Wednesday, speaking to more than 170,000 full-time employees.

To this end, Pichai introduced the “Simplicity Sprint” initiative to gather ideas for faster product development. “Sprint” is a term often used in software development and by technology start-ups to refer to short, focused pushes toward a common goal.

Pichai said the company is letting employees share their ideas through August 15 with an internal survey asking if management can reach out if they have follow-up questions.

During the meeting, Pichai said it was an effort for the company to “get better results faster.” The survey, seen by CNBC, shows that it may also be used to cut spending in certain regions.

Questions in the survey include “What will help you work more clearly and efficiently to serve our users and customers? Where should we remove speed pits to get better results faster? How do we eliminate waste and keep entrepreneurship and focus as we grow?”

The request also comes as the company tries to ease tensions between employees and executives after an annual “Googlegeist” survey found that employees gave the company particularly poor marks in terms of pay, promotions and execution.

Highlighting a 7% dip in opinions about Google’s implementation, CEO Prabhakar Raghavan wrote at the time, “This means we need to draw more attention to busting the bureaucracy.” Raghavan is among the company’s most important and influential executives, overseeing research, advertising, mapping and other areas.

In May, the company announced that it would reform its performance appraisal process that will lead to higher salaries while hoping to reduce bureaucracy around compensation and bonuses.

– ‘Some worry’

At Wednesday’s meeting, executives addressed employee concerns about possible layoffs. One of the top-rated questions was, “In light of Sundar’s statement that increased Google focus” means consolidation as investments overlap and streamlining of operations, “Shall we expect layoffs?”

Pichai handed the question to Fiona Ciccone, Chief Google Officer.

While Cicconi said the company is still hiring and has no plans to lay off workers for now, she hasn’t ruled it out.

“We are asking teams to be more focused and efficient and are working to define what that means as a company as well. While we can’t be certain about the economy in the future, we are not currently looking to reduce the overall workforce at Google.”

She also said, “I’ve really come to realize that there is some concern about this based on what we’re hearing from other companies and what they’re doing, and as Sundar reported, we’re still hiring for important roles,” Cicconi said. She asked employees to remember that it was still the largest hiring year in the company’s history.

In the second quarter, Alphabet said its headcount rose 21% to 174,014 full-time employees from 144,056 a year earlier. However, the company said last month that it would slow the pace of hiring and investments through 2023, and CEO Sundar Pichai told employees in a note: “We are not immune to economic headwinds.”

Pichai referred to the broader economic headwinds several times. “If you’re looking to see what’s going on externally – I’m sure you’re all reading the news – people in businesses who use Google products are facing their own challenges right now.”

Leave a Reply

%d bloggers like this: