Alphabet CEO Sundar Pichai gestures during a session at the annual meeting of the World Economic Forum (WEF) in Davos, January 22, 2020.
FABRICE COFFRINI | AFP | Getty Images
Google CEO Sundar Pichai defended the cloud unit’s new office sharing policy for employees, describing some of the company’s offices as virtually empty and reminding employees that real estate is expensive.
“To me, it’s obvious that they’re trying to be efficient and save money, but at the same time also use up resources,” Pichai said in a company-wide meeting. last week, according to audio obtained by CNBC. “There are people, by the way, who regularly complain that they come in and there are big swathes of empty offices and it feels like a ghost town – it’s not just not a pleasant experience.”
Pichai’s comments follow a CNBC Report last month on Google’s plan to ask cloud employees and partners to share offices in the division’s five largest locations, which include New York and San Francisco. The company is calling the downsizing effort Cloud Office Evolution (CLOE).
On Alphabet’s fourth quarter earnings call in early February, executives said they expect Google to incur approximately $500 million in costs in the current period related to the reduction in global office space, as the company is counting on slowing income growth and lingering recessionary issues.
Pichai said many people come into the office “only two days a week,” which he says makes current space usage inefficient.
“We should be good stewards of financial resources,” Pichai said. “We have expensive real estate. And if it’s only used 30% of the time, we have to be careful how we think about it.”
At the same town hall meeting, Anas Osman, vice president of strategy and operations at Google Cloud, said about a third of employees visit offices at least four days a week, citing data from a group-led pilot project on return. at physical locations.
As part of the pilot, Osman said, employees were given the option of having a dedicated or shared office.
“These individual offices were actually used about 35% of the time at four or more days,” Osman said. “We think it’s a good balance between finding efficiencies and creating a better experience.”
In some ways, sharing has also led to more productivity, he said.
“Pilot data shows that Googlers reported significantly better collaboration when they had days assigned to the office, even though it was in a rotational model and a shared office,” Osman said.
Pichai said the new policy currently only applies to cloud employees, and added that the company is “giving teams the freedom to experiment.” The cloud division accounts for about a quarter of the company’s overall workforce.
During the meeting, Pichai addressed employee concerns about the rollout of the desktop sharing policy and how it was communicated to staff. CNBC previously reported that memes started popping up in the internal Memegen system criticizing management’s posts. A popular meme said, “Not all cost-cutting measures need to be mangled to sound good to employees.
Responding to questions and comments submitted by employees, Pichai read one that read, “Double talk is disrespectful and frustrating” and “bad things happen, no need to make every bad thing sound like a miracle. “.
Pichai replied, “I agree with the sentiment here. The comments are valid.”
“We should always strive to be as simple as possible,” Pichai said. “I think it’s important to understand that at our scale almost all communications are public in nature. You’re talking to the world and there are many, many stakeholders and so sometimes nuance is important and the words can have a material impact and I think sometimes you see that reflected in some of the communications.”
A Google spokesperson did not immediately respond to a request for comment.