Productivity and focus need to improve

Google CEO Sundar Pichai speaks onstage at the annual Google I/O developer conference in Mountain View, Calif., May 8, 2018.

Stephen Lam | Reuters

Google is launching a new effort called “Simplicity Sprint” in an effort to improve efficiency and improve employee focus in an uncertain economic environment.

Alphabet company had its steady hands last Wednesday and the tone was somewhat urgent as workers expressed concerns about layoffs and CEO Sundar Pichai asked employees for input, according to attendees and related internal documentation reviewed by CNBC. Google’s productivity as a company isn’t where it needs to be, even with the workforce it has, Google’s CEO Sundar Pichai told employees at the meeting.

“I wanted to provide some additional context after our earnings results and also ask for your help,” Pichai opened, citing Tuesday’s Q2 earnings report. “Clearly we face 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 workforce we have.” He asked employees to “create a culture that is more mission-oriented, more focused on our products and more customer-oriented. We need to think about how we can minimize distractions and really raise the bar for both product excellence and productivity.”

It comes after the company reported its second consecutive quarter of weaker-than-expected earnings and earnings on Tuesday. Revenue growth slowed to 13% in the quarter from 62% a year earlier, as the company benefited from the reopening after the pandemic and consumer spending rose. CFO Ruth Porat said she expected some of the challenges to continue in the near 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 “on sunnier days”.

‘Simplicity Sprint’

“I’d love to get any help from you,” Pichai said at the all-hands meeting on Wednesday, 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 attempts 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 asking 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 at the meeting. The survey, which was reviewed by CNBC, shows that it can also be used to cut costs in certain areas.

Questions in the survey include: “What would help you work with greater clarity and efficiency to serve our users and customers? Where should we remove speed bumps to get to better results faster? How do we eliminate waste? and do we stay entrepreneurial and focused as we grow?”

The request also comes as the company seeks to ease tensions between employees and executives after an annual “Googlegeist” survey found that executives gave the company particularly poor marks on pay, promotions and execution.

Prabhakar Raghavan highlighted a 7% drop in opinions about Google’s execution, writing at the time, “That means we need to pay more attention to breaking bureaucracy.” Raghavan is one of the most important and influential executives at the company, overseeing search, advertising, mapping and other areas.

In May, the company announced it would review its performance review process, which will result in higher salaries, while hoping to reduce red tape around benefits and pay increases.

‘Any fear’

In Wednesday’s all-hands meeting, executives expressed employee concerns about potential layoffs. One of the top-rated questions was, “In light of Sundar’s statement that sharpening Google’s focus means ‘consolidating where investments overlap and streamline processes’, should we expect layoffs?”

Pichai handed the question to Google’s chief people officer, Fiona Cicconi.

Although Cicconi said the company is still hiring and has no plans for layoffs at this time, she didn’t rule it out.

“We’re asking teams to be more focused and efficient, and we’re also exploring what that means as a company. While we can’t be sure of the economy going forward, we don’t currently plan to reduce Google’s overall workforce.”

She also said, “I really understand that there is some concern about this based on what we’re hearing from other companies and what they’re doing and as Sundar said, we’re still hiring for critical roles,” Cicconi said. She asked employees to remember that this is still the biggest hiring year in the company’s history.

In the second quarter, Alphabet said its workforce increased 21% to 174,014 full-time employees, from 144,056 the year before. However, the company said last month it will slow the pace of hiring and investment until 2023, and CEO Sundar Pichai told employees in a memo, “we are not immune to economic headwinds.”

Pichai pointed to the broader economic headwind several times. “If you look at what’s happening externally — I’m sure you’re all reading the news — the people in companies using Google products right now face their own challenges.”

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