Sundar Pichai: Layoffs at Google prevented worse issues

Sundar Pichai, Google’s CEO told the employees of the company on Monday (January 23) that action had to be taken to reduce the workforce, as the growth rate of the company had slowed down.

Pichai, chief executive officer of Google’s parent company Alphabet Inc., disclosed at an internal meeting that he sought the advice of the company’s founders and board before making the decision to reduce the workforce by 6 per cent, reported Bloomberg, after they had reviewed the remarks.

Pichai is supposed to have said at the meeting that if they don’t act clearly and decisively and early, they can compound the problem and make it much worse. And added that these were decisions he had to make.

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It was not a random process, he said, added the report. Further, he also disclosed that as the bonuses were linked to the company’s performance, and in order to maintain accountability among the leadership, all the senior vice-presidents and higher-ups were expected to see a considerable decrease in their annual bonuses this year.

On Friday, Google announced that it would be shedding around 12,000 jobs, becoming the latest tech giant to downsize after a prolonged period of expansion and recruitment. Despite rumours about the layoffs circulating for some time, the news still came as a surprise to some employees.

A few found out that they had lost their jobs when they were not able to access their corporate accounts. However, Pichai emphasised that the cuts were the result of thoughtful deliberation.

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In a meeting with the employees, Fiona Cicconi, Google’s Chief People Officer, explained that in an ideal scenario, they would have given advance notice to managers, but as Google has more than 30,000 managers, it was not possible. She added that the company wanted to provide clarity as soon as possible.

Also, the report stated that another top executive pointed out that the severance packages were structured in such a way that would provide compensation to employees who have been with the company for a long time.

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Additionally, Ruth Porat, the CFO of Alphabet, highlighted in the meeting that the layoffs were carried out to allow the company to continue investing in crucial areas of focus.

Porat said that act early, and you then create the capacity to invest for long-term growth and added that as difficult as this was, “those were the takeaways”, the Bloomberg report said.