COMP NEWS – In a new cost-cutting strategy, Google is cutting a range of employee benefits ranging from food, laptops, expenses, and massages.
Google’s finance chief Ruth Porat recently said in a rare companywide email that the company is making cuts to employee services.
“These are big, multi-year efforts,” Porat said in a Friday email titled: “Our company-wide OKR on durable savings.” Elements of the email were previously reported by The Wall Street Journal.
In separate documents viewed by CNBC, Google said it’s cutting back on fitness classes, staplers, tape and the frequency of laptop replacements for employees.
One of the company’s important objectives for 2023 is to “deliver durable savings through improved velocity and efficiency.” Porat said in the email. “All PAs and Functions are working toward this,” she said, referring to product areas. OKR stands for objectives and key results.
The latest cost-cutting measures come as Alphabet-owned Google continues its most severe era of cost cuts in its almost two decades as a public company. The company said in January that it was eliminating 12,000 jobs, representing about 6% of its workforce, to reckon with slowing sales growth following record head count growth.
Budget cuts have surfaced in other areas as well, as the company began cutting benefits from laid-off employees.
Cuts have shown up in other ways. The company declined to pay the remainder of laid-off employees’ maternity and medical leaves, CNBC previously reported.
Among the equipment changes, Google is pausing refreshes for laptops, desktop PCs and monitors. It’s also “changing how often equipment is replaced,” according to internal documents viewed by CNBC.
Google employees who are not in engineering roles but require a new laptop will receive a Chromebook by default. Chromebooks are laptops made by Google and use a Google-based operating system called Chrome OS.
It’s a shift from the range of offerings, such as Apple MacBooks, that were previously available to employees. “It also provides the best opportunity across all of our managed devices to prevent external compromise,” one document about the laptop changes said.
An employee can no longer expense mobile phones if one is available internally, the document also stated. And employees will need director “or above” approval if they need an accessory that costs more than $1,000 and isn’t available internally.
Food and massages are also being cut, as the transition to work-from-home and hybrid work models leaves in-office employee services being underutilized.
Google’s also cutting some availability of employee services.
“We set a high bar for industry-leading perks, benefits and office amenities, and we will continue that into the future,” Porat’s email stated. “However, some programs need to evolve for how Google works today.”
“These are mostly minor adjustments,” stated a separate internal document from the company’s real estate and workplace team. The document said food, fitness, massage and transportation programs were designed for when Googlers were coming in five days a week.
“Now that most of us are in 3 days a week, we’ve noticed our supply/demand ratios are a bit out of sync: We’ve baked too many muffins on a Monday, seen GBuses run with just one passenger, and offered yoga classes on a Friday afternoon when folks are more likely to be working from home,” the document stated.
As a result, Google may close cafes on Mondays and Fridays and shut down some facilities that are “underutilized” due to hybrid schedules, the document states.
As a part of the January U.S. layoffs, the company let go of more than two dozen on-site massage therapists.
To read more about Google’s endeavors to cut employee benefits, click here.
For more Comp News, see our recent posts.
Comp News is brought to you by CompXL, the flexible compensation software provider that enables mid- to large-size organizations to implement competitive pay structures such as vested stock options and variable incentive pay.
