Google is implementing a range of cost-cutting measures, including reducing the frequency of laptop replacements, cutting back on fitness classes, and reducing office supplies. The measures are part of a multi-year effort to improve velocity and efficiency and deliver durable savings. Google is also reducing the availability of employee services, such as food, fitness, massage, and transportation programs. The changes reflect a shift in priorities for the company, which has traditionally been known for offering its employees an array of perks and benefits that are often regarded as some of the best in the industry.
Google, one of the largest technology companies in the world, is implementing a range of cost-cutting measures as it seeks to maintain profitability and rein in expenses. According to internal documents seen by CNBC, the measures include a reduction in the frequency of laptop replacements, the cutting back of fitness classes, and reductions in office supplies like staplers and tape. Google’s finance chief Ruth Porat, who announced the measures in a company-wide email, said that they were part of a multi-year effort to improve velocity and efficiency and to deliver durable savings.
The company has been through a period of severe cost cuts, with Google’s parent company, Alphabet, announcing in January that it would eliminate 12,000 jobs, accounting for around 6% of its workforce. The move was aimed at tackling slowing sales growth following a period of rapid expansion. The company has also faced criticism over its handling of employee benefits. For example, CNBC reported that Google declined to pay the remainder of maternity and medical leave for laid-off employees.
In her email, Porat referred to 2008, stating that “we’ve been here before.” She explained that in 2008, the company had to address similar problems with expenses outpacing revenue and was able to improve efficiency by reducing real estate investments, tightening budgets, and cutting back on certain perks like cafes and micro-kitchens.
The latest measures are intended to help Google reduce expenses, improve efficiency, and maintain profitability in a challenging economic environment. They reflect a shift in priorities for the company, which has traditionally been known for offering its employees an array of perks and benefits that are often regarded as some of the best in the industry.
One of the most significant changes outlined in the internal documents and seen by CNBC is the reduction in the frequency of laptop replacements for employees. Google is pausing refreshes for laptops, desktop PCs, and monitors, and is also “changing how often equipment is replaced.” Employees who are not in engineering roles but require a new laptop will receive a Chromebook by default, instead of the range of offerings that were previously available, such as Apple MacBooks.
Other measures include a reduction in the availability of employee services, such as food, fitness, massage, and transportation programs, which were designed for a five-day working week. Now, that most Google employees work three days in the office and two days remotely, these programs are out of sync with demand. Google may close cafes on Mondays and Fridays and shut down, some facilities that are “underutilized” due to hybrid schedules according to internal documents.
The reduction of office supplies like staplers and tape is also part of the cost-cutting measures. The company has asked employees to borrow these supplies from the reception desk, rather than providing them at print stations. However, a Google spokesperson said that the internal message about staplers and tape was misinformed and that “staplers and tape continue to be provided to print stations.”
While Google’s decision to reduce perks and benefits may come as a surprise to some, it is part of a broader trend across the tech industry. As companies face increased scrutiny from investors and regulators, they seek to cut costs and improve profitability. However, Google’s reputation for providing excellent employee perks and benefits is part of what sets it apart from its competitors, and the company will need to strike a delicate balance between cost-cutting and maintaining its unique culture in the years ahead.