What you need to know
- Sundar Pichai reportedly wants Google to become 20% more efficient.
- The Alphabet and Google CEO suggested this at the recent Code Conference.
- With an expected economic crisis in the near future, layoffs can be one way to achieve the mark.
Google and Alphabet CEO Sundar Pichai was speaking at Code Conference in Los Angeles on Tuesday, hosted by Kara Swisher, where he shared his plans to make the company run more efficiently. The process could potentially involve headcount cuts as a result of future economic challenges and the company's rapid hiring spree, CNBC reports.
To achieve a more efficient Google, Pichai suggests a broader slowdown in spending on ads might also be necessary. In contrast, the company has been one of the largest beneficiaries of advertisements thanks to products like Search and YouTube. However, the company's latest earnings report saw the company fall behind on analyst expectations, which has been a common trend in the industry as of late.
"The more we try to understand the macroeconomic, we feel very uncertain about it," Pichai mentioned at the conference. He further added, "the macroeconomic performance is correlated to ad spend, consumer spend and so on."
Pichai believes Google has evidently become "slower" after its rapid hiring over the years, which is why the company has slowed down hiring for the remainder of the year. Pichai further insists that fewer resources would be beneficial as employees can be productive and work on the right things.
"We want to make sure as a company, when you have fewer resources than before, you are prioritizing all the right things to be working on and your employees are really productive that they can actually have impact on the things they're working on so that's what we are spending our time on."
Google's HR chief Fiona Clare Cicconi reportedly stated earlier this year that the company is "not currently looking to reduce Google's overall workforce." However, it seems like it might still be on the table after Cicconi cited economic uncertainty going forward.
Another option for Google is to cut spending by reducing employee travel, as The Information (via Business Insider) pointed out. The report mentions an internal email sent to a few managers alerting them to limit employee travel only to "business critical" trips. The report further suggests the company could axe approvals for its social functions and other types of travel.
A Google spokesperson further confirmed similar thoughts to Insider, suggesting they did share "guidance about taking a responsible approach on expense management, including travel and events." The spokesperson said the guidance was based on the needs of different product groups.
Pichai further acknowledges that across everything that's being done at Google, they can be slower at making decisions. But at the end of the day, it's always about making the company 20% more productive, Pichai says, citing an example of transitioning the Google Play Music app to YouTube Music.
"Sometimes there are areas to make progress [where] you have three people making decisions, understanding that and bringing it down to two or one improves efficiency by 20%," said Pichai.
