Google CEO Sundar Pichai speaks on stage during the annual Google I/O developer conference in Mountain View, California, on May 8, 2018.
Stephen Lam | Reuters
Google is launching a new effort called the “Simplicity Sprint” in an effort to improve efficiency and improve employee focus in an uncertain economic environment.
The Alphabet company held its usual all-hands last Wednesday, and the tone was somewhat urgent as employees expressed concerns about layoffs and CEO Sundar Pichai asked employees for input, according to attendees and related internal documents seen by CNBC. Google̵[ads1]7;s productivity as a company is not where it needs to be even with the number of employees, Google CEO Sundar Pichai told employees in the meeting.
“I wanted to provide some additional context after our earnings results, and ask for your help as well,” Pichai opened, referring to the company’s second-quarter earnings report on Tuesday. “It is clear that we are facing a challenging macro environment with more uncertainty ahead.”
He added, “There are real concerns that our productivity as a whole is not where it needs to be for the number of employees that we have.” He asked employees to help “create a culture that’s more mission-focused, more focused on our products, more customer-focused. We should think about how we can minimize distractions and really raise the bar for both product excellence and productivity.”
It comes after the company on Tuesday reported its second straight quarter of weaker-than-expected revenue and earnings. Revenue growth slowed to 13% in the quarter from 62% a year earlier, as the company benefited from the post-pandemic reopening and consumer spending was on the rise. CFO Ruth Porat said she expected some of the challenges to continue in the short term, but the company is not providing formal guidance.
It also comes after Pichai recently announced it would slow the pace of hiring and investment through 2023, asking employees to work “with greater urgency” and “more hunger” than seen “on sunnier days.”
“I would love to have all your help,” Pichai said in Wednesday’s all-hands meeting, speaking to his more than 170,000 full-time employees.
To that end, Pichai introduced a “Simplicity Sprint” initiative to crowdsource ideas for faster product development. “Sprint” is a term often used in software development and by tech startups to denote short, focused pushes toward a common goal.
Pichai said the company is opening the floor for employees to share their ideas until Aug. 15 through an internal survey that asks if management can reach out if they have follow-up questions.
It’s an effort for the company to “get better results faster,” Pichai said during the meeting. The survey, seen by CNBC, shows that it can also be used to cut back in certain areas.
Questions in the survey include “What will help you work with greater clarity and efficiency to serve our users and customers? Where should we remove speed bumps to achieve better results faster? How do we eliminate waste and remain entrepreneurial and focused as we grow?”
The request also comes as the company tries to ease tensions between employees and managers after an annual “Googlegeist” survey found employees gave the company particularly poor marks on pay, promotions and performance.
CEO Prabhakar Raghavan highlighted a 7% drop in views on Google’s execution, writing at the time “it means we need to pay more attention to breaking red tape.” Raghavan is among the most important and influential executives at the company, overseeing search, ads, mapping and other areas.
In May, the company announced it would overhaul its performance evaluation process that will result in increased wages while hoping to reduce red tape around compensation and raises.
In Wednesday’s all-hands meeting, executives addressed employee concerns about potential layoffs. One of the top-ranked questions was “In light of Sundar’s statement that sharpening Google’s focus ‘means consolidation where investments overlap and streamlining processes,’ should we expect layoffs?”
Pichai turned the question over to Google’s Chief People Officer, Fiona Cicconi.
While Cicconi said the company is still hiring and has no plans for layoffs right now, she didn’t rule it out.
“We’re asking the teams to be more focused and efficient, and we’re working to figure out what that means as a company as well. While we can’t be certain about the financials going forward, we are not looking to reduce Google’s overall workforce.”
She also said, “I really understand there’s some anxiety around this based on what we’re hearing from other companies and what they’re doing, and as Sundar mentioned, we’re still hiring for critical roles,” Cicconi said. She asked employees to remember that it remains the biggest hiring year in the company’s history.
In the second quarter, Alphabet said its headcount increased 21% to 174,014 full-time employees from 144,056 a year earlier. However, the company said last month it will slow the pace of hiring and investment through 2023, and CEO Sundar Pichai told employees in a memo, “we are not immune to economic headwinds.”
Pichai noted the broader economic headwinds several times. “If you look at what’s going on externally — I’m sure you all read the news — people in businesses that use Google products are facing their own challenges right now.”