When Google cost cutting goes molecular: Staples, sticky tape, and PC sweating
(2023/04/04)
- Reference: 1680622028
- News link: https://www.theregister.co.uk/2023/04/04/google_cost_cutting/
- Source link:
Google's beancounters are hunting down ways to satisfy corporate expense bill reductions, with many staff asked to sweat PC assets and some noting things like availability of staples and sticky tape becoming more limited.
In an email to Googlers, Ruth Porat, the chief financial officer at the ad search and cloud biz, described "multi-year efforts" to push through "durable savings," according to a series of internal documents seen by [1]CNBC .
"This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward – particularly in AI," she added.
[2]
Google parent Alphabet confirmed in January that globally it was erasing [3]12,000 employees from the payroll , following a period of heavy recruitment during the pandemic when headcount went from 120,000 in Q1 2020 to more than 186,000 in September last year. [4]Microsoft , [5]Amazon and [6]others have taken similar action.
[7]
[8]
CEO Sundar Pichai told staff at the time the company hired for a "different economic reality than the one we face today." Google's sales growth has slowed in recent quarters, and in Q4 it reported a 1 percent rise in revenue to $76.04 billion and a 34 percent year-on-year fall in net profit to $13.62 billion.
For [9]2022 as a whole , the group booked a 10 percent rise in turnover to $282.83 billion, and hauled in net income of $59.97 billion versus $76.03 billion in the prior year. Total costs and expenses were $207.9 billion.
[10]
"We've been here before," Porat said in her email. "Back in 2008, our expenses were growing faster than our revenue. We improved machine utilization, narrowed our real estate investments, tightened our belt on T&E (travel and entertainment) budgets, cafes, micro kitchen and mobile phone usage, and removed the hybrid vehicle subsidy."
"Just as we did in 2008, we'll be looking at data to identify other areas of spending that aren't as effective as they should be, or that don’t scale at our size," the CFO added.
One area to be beaten by the cost-cutting stick is portable and desktop-based PC and monitors. Googlers are putting [11]refreshes on hold , and the document says that staff outside of engineering that need a new laptop will get a Chromebook by default, not the range of machines – including shiny Apple MacBooks – that were once open to them.
[12]
This might prove a nice shot in arm for Chromebook sales, which [13]started to decline in autumn 2021 following a buying frenzy in education.
In a related document, Google says this move "also provides the best opportunity across all our managed devices to prevent external compromise," which is one way to spin the change in how kit is replaced. With respect to mobile phones, buying handsets that cost more than $1,000 will need at least director level approval. CloudTop will be the "default desktop" for staff.
[14]Google institutional investor calls for wider cuts: 30k jobs
[15]BT CEO orders staff: Back to the office or risk 'disciplinary action'
[16]Google CEO Pichai: We need to up productivity by a fifth
[17]Amazon mandates return to office for 300,000 corporate staff
[18]WFH? Google Cloud's offices like a 'ghost town' before new policy
[19]Don't Be Evil, a gaggle of Googlers tell CEO Pichai amid mega layoffs
[20]Euro cloud providers react to MS potentially cutting deal on antitrust
"We set a high bar for industry-leading perks, benefits and office amenities, and we will continue that into the future," said Porat. "However, some programs need to evolve for how Google works today."
The programs for food, gym, massage and transportation were built for a world when employees came into the office every day but that has changed since the pandemic. Google even introduced a desk sharing scheme – [21]currently only for US-based Google Cloud employees – in February as the company consolidates some real estate.
In a document, Google said: “Now that most of us are in three days a week, we noticed our supply/demand ratios are a bit out of sync: We’ve baked too many muffins on a Monday, seen gBuses
As a result, some cafes may close on Mondays and Fridays, as they are under-used.
Perhaps channeling its inner-Capita – a UK tech biz known for penny pinching – Google will no longer provide staples and sticky tape at print stations in offices. This is "part of a cost effectiveness initiative," said another company document.
In a statement sent to The Register , Google said: "As we've publicly stated, we have a company goal to make durable savings through improved velocity and efficiency. As part of this, we're making some practical changes to help us remain responsible stewards of our resources while continuing to offer industry-leading perks, benefits, and amenities." ®
Get our [22]Tech Resources
[1] https://www.cnbc.com/2023/04/03/google-to-cut-down-on-employee-laptops-services-and-staplers-to-save.html
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2023/01/20/google_to_chop_12000_employees/
[4] https://www.theregister.com/2023/01/18/microsoft_job_cuts/
[5] https://www.theregister.com/2023/03/20/amazon_9000_layoffs/
[6] https://www.theregister.com/2023/03/24/accenture_19000_layoffs/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://abc.xyz/investor/static/pdf/2022Q4_alphabet_earnings_release.pdf?cache=9de1a6b
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2023/01/31/gartner_pc_shipment_forecast/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2021/10/13/chroembook_sales_crash/
[14] https://www.theregister.com/2023/01/25/google_investor_more_cuts/
[15] https://www.theregister.com/2022/09/21/bt_ceo_orders_staff_back/
[16] https://www.theregister.com/2022/09/07/google_ceo_sundar_pichai_productivity/
[17] https://www.theregister.com/2023/02/20/amazon_mandates_return_to_office/
[18] https://www.theregister.com/2023/03/07/wfh_google_clouds_offices_empty/
[19] https://www.theregister.com/2023/03/20/dont_be_evil_a_gaggle/
[20] https://www.theregister.com/2023/03/30/microsoft_euro_complaints/
[21] https://www.theregister.com/2023/02/23/google_staff_asked_to_share/
[22] https://whitepapers.theregister.com/
In an email to Googlers, Ruth Porat, the chief financial officer at the ad search and cloud biz, described "multi-year efforts" to push through "durable savings," according to a series of internal documents seen by [1]CNBC .
"This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward – particularly in AI," she added.
[2]
Google parent Alphabet confirmed in January that globally it was erasing [3]12,000 employees from the payroll , following a period of heavy recruitment during the pandemic when headcount went from 120,000 in Q1 2020 to more than 186,000 in September last year. [4]Microsoft , [5]Amazon and [6]others have taken similar action.
[7]
[8]
CEO Sundar Pichai told staff at the time the company hired for a "different economic reality than the one we face today." Google's sales growth has slowed in recent quarters, and in Q4 it reported a 1 percent rise in revenue to $76.04 billion and a 34 percent year-on-year fall in net profit to $13.62 billion.
For [9]2022 as a whole , the group booked a 10 percent rise in turnover to $282.83 billion, and hauled in net income of $59.97 billion versus $76.03 billion in the prior year. Total costs and expenses were $207.9 billion.
[10]
"We've been here before," Porat said in her email. "Back in 2008, our expenses were growing faster than our revenue. We improved machine utilization, narrowed our real estate investments, tightened our belt on T&E (travel and entertainment) budgets, cafes, micro kitchen and mobile phone usage, and removed the hybrid vehicle subsidy."
"Just as we did in 2008, we'll be looking at data to identify other areas of spending that aren't as effective as they should be, or that don’t scale at our size," the CFO added.
One area to be beaten by the cost-cutting stick is portable and desktop-based PC and monitors. Googlers are putting [11]refreshes on hold , and the document says that staff outside of engineering that need a new laptop will get a Chromebook by default, not the range of machines – including shiny Apple MacBooks – that were once open to them.
[12]
This might prove a nice shot in arm for Chromebook sales, which [13]started to decline in autumn 2021 following a buying frenzy in education.
In a related document, Google says this move "also provides the best opportunity across all our managed devices to prevent external compromise," which is one way to spin the change in how kit is replaced. With respect to mobile phones, buying handsets that cost more than $1,000 will need at least director level approval. CloudTop will be the "default desktop" for staff.
[14]Google institutional investor calls for wider cuts: 30k jobs
[15]BT CEO orders staff: Back to the office or risk 'disciplinary action'
[16]Google CEO Pichai: We need to up productivity by a fifth
[17]Amazon mandates return to office for 300,000 corporate staff
[18]WFH? Google Cloud's offices like a 'ghost town' before new policy
[19]Don't Be Evil, a gaggle of Googlers tell CEO Pichai amid mega layoffs
[20]Euro cloud providers react to MS potentially cutting deal on antitrust
"We set a high bar for industry-leading perks, benefits and office amenities, and we will continue that into the future," said Porat. "However, some programs need to evolve for how Google works today."
The programs for food, gym, massage and transportation were built for a world when employees came into the office every day but that has changed since the pandemic. Google even introduced a desk sharing scheme – [21]currently only for US-based Google Cloud employees – in February as the company consolidates some real estate.
In a document, Google said: “Now that most of us are in three days a week, we noticed our supply/demand ratios are a bit out of sync: We’ve baked too many muffins on a Monday, seen gBuses
Google's campus shuttle buses
run with just one passenger, and offered yoga classes on a Friday afternoon where folk are more likely to be working from home."As a result, some cafes may close on Mondays and Fridays, as they are under-used.
Perhaps channeling its inner-Capita – a UK tech biz known for penny pinching – Google will no longer provide staples and sticky tape at print stations in offices. This is "part of a cost effectiveness initiative," said another company document.
In a statement sent to The Register , Google said: "As we've publicly stated, we have a company goal to make durable savings through improved velocity and efficiency. As part of this, we're making some practical changes to help us remain responsible stewards of our resources while continuing to offer industry-leading perks, benefits, and amenities." ®
Get our [22]Tech Resources
[1] https://www.cnbc.com/2023/04/03/google-to-cut-down-on-employee-laptops-services-and-staplers-to-save.html
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2023/01/20/google_to_chop_12000_employees/
[4] https://www.theregister.com/2023/01/18/microsoft_job_cuts/
[5] https://www.theregister.com/2023/03/20/amazon_9000_layoffs/
[6] https://www.theregister.com/2023/03/24/accenture_19000_layoffs/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://abc.xyz/investor/static/pdf/2022Q4_alphabet_earnings_release.pdf?cache=9de1a6b
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2023/01/31/gartner_pc_shipment_forecast/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZCxJnZI7Vk6jTLqyZQQrMQAAAIo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2021/10/13/chroembook_sales_crash/
[14] https://www.theregister.com/2023/01/25/google_investor_more_cuts/
[15] https://www.theregister.com/2022/09/21/bt_ceo_orders_staff_back/
[16] https://www.theregister.com/2022/09/07/google_ceo_sundar_pichai_productivity/
[17] https://www.theregister.com/2023/02/20/amazon_mandates_return_to_office/
[18] https://www.theregister.com/2023/03/07/wfh_google_clouds_offices_empty/
[19] https://www.theregister.com/2023/03/20/dont_be_evil_a_gaggle/
[20] https://www.theregister.com/2023/03/30/microsoft_euro_complaints/
[21] https://www.theregister.com/2023/02/23/google_staff_asked_to_share/
[22] https://whitepapers.theregister.com/
Doctor Syntax
Providing they buy enough string and sealing wax to keep the servers from falling apart it should be OK.
Doctor Syntax
I suppose the objective is to keep the activist investors off their backs - and off the board.
But didn't the decline of HP start with cutting the daily doughnuts?
Charlie Clark
To be honest, most of the reductions are understandable and much more reasonable than a lot of the shit that beancounters come up with in cost-cutting exercises that tend to cost more than they cut. By "reasonable", I mean: refresh rate and choice for notebooks and phones; catering and transport. The staples and sellotape thing sounds a bit odd as it will be peanuts in total. But I suspect this may be more about the provisioning of items that routinely go missing. Centralise distribution and you've reduced the need for someone to go round and replenish supplies. More important is probably a print-to-me system so that documents are only printed when you're at the printer. Better budgetting and fewer reams of stuff that go unclaimed.
Of course, most accountants will point out that anything that business expenses are nearly always offset against tax and so don't end up costing companies much. Of course, reducing office space and services will have a noticeable affect on the local economy.
"Google will no longer provide staples and sticky tape at print stations in offices"
This begs the question : are staples and sticky tape a necessity ?
If so, then where will Google provide such necessities ?
Or is Google become a BYOS (Bring Your Own Staples) environment ?