Google CEO Pichai told employees that money should not be equated with fun

Google CEO Sundar Pichai advised employees not to equate pleasure with money when speaking to them at the TGIF (Thank God It’s Friday) meeting held in New York, reports CNBC. At it, employees allegedly asked Pichai why the company was “robbing” them by cutting travel and bonus budgets at a time when “Google has record profits and huge cash reserves.”

“How do I say it?” Pichai began his measured response. “Look, I hope all of you are reading the news, externally. The fact that you know, we are being a bit more responsible through one of the toughest macroeconomic conditions underway in the past decade, I think it’s important that as a company, we pull together to get through moments like this.”

In July, Alphabet reported weaker-than-expected profit and revenue for the second quarter in a row, and third-quarter sales growth is expected to be in the single digits, down from more than 40% growth a year earlier. Pichai acknowledged that it wasn’t just the economy that caused problems at Google, but also red tape at the growing company.

However, during the meeting he allegedly sounded irritated and reminded employees that “we can’t always choose macroeconomic conditions.”

After the company’s headcount surged during the pandemic, CFO Ruth Porath said earlier this year that she expected some economic challenges to persist in the near term. Google has canceled the next generation of its Pixelbook and cut funding to the domestic incubator Area 120.

In July, Google launched a campaign called Simplicity Sprint, which aims to collect ideas from its more than 174,000 employees on how to “achieve better results faster” and “remove obstacles.” Earlier this month, Pichai said he hoped to make the company 20% more productive by slowing hiring and investment.

One of the most popular questions asked by employees at the meeting was addressed to Pichai and included an offer to elaborate on the comment for a 20% performance boost.

“Maybe you were planning on hiring six more people but maybe you are going to have to do with four and how are you going to make that happen? The answers are going to be different with different teams,” Pichai replied.

Pichai said management is analyzing more than 7,000 responses received from employees about suggestions they submitted as part of the Simplicity Sprint program.

“Sometimes we have a product launch process, which has probably, over many years, grown more complicated than maybe it needs to be,” Pichai said. “Can we look at that process and maybe remove two steps and that’ll be an example of making something 20% more efficient? I think all of us chipping in and doing that across all levels, I think can help the company. At our scale, there is no way we can solve that unless units of teams of all sizes do better.”

Pichai also briefly mentioned a recent employee survey in which they criticized the growing bureaucracy at the company.

Another employee question was how the company would share its plans for potential job cuts, after news leaked of the Pixelbook cancellation and Area 120 layoffs affecting “employees’ ability to focus on work.” Pichai responded by saying that he would “try to notify the company of the most important updates.”

Google’s CEO avoided answering employees’ questions about cutting executive salaries. Last year, he received a total salary of $6.3 million, while other top managers earned more than $28 million.

Pichai touched on the broader topic of cost-cutting and noted that Google’s culture could still be nice even if some things, like certain perks, were taken away.

“I remember when Google was small and scrappy,” he said. “Fun didn’t always — we shouldn’t always equate fun with money. I think you can walk into a hard-working startup and people may be having fun and it shouldn’t always equate to money.”

At the end of the meeting, Pichai answered a question about why the company had moved from “rapidly hiring and spending to equally aggressive cost saving”.

“I’m a bit concerned that you think what we’ve done is what you would define as aggressive cost saving,” he said. “I think it’s important we don’t get disconnected. You need to take a long-term view through conditions like this.”

He added that the company is “still investing in long-term projects like quantum computing,” and said that at times of uncertainty, it’s important “to be smart, to be frugal, to be scrappy, to be more efficient.”