Google employees pressure costumed executives during an all-hands meeting for clarity on cost savings

Alphabet Executives, wearing Halloween costumes, faced questions from concerned employees at an all-employees meeting on Wednesday, following comments about the company’s profit figures that indicated more cost cuts were on the way.

“There is a reality behind it,” said Brian Ong, vice president of Google Recruitment, according to a recording of the meeting reviewed by CNBC. “We are hiring fewer staff than a few years ago.”

Ong, responding specifically to a question about retention and promotion opportunities, added that there are fewer job openings and geographic recruitment has changed, “so you may see fewer job openings where you are.”

A Google spokesperson declined to comment.

The meeting came after Alphabet came forward better than expected third-quarter earnings and revenue Tuesday, sparking a rally in stocks. On a call with investors, CFO Anat Ashkenazi, who recently succeeded Ruth Porat, said: proclaimed she wanted to “go a little further” with cost savings across the company.

Google’s chief scientist, Jeff Dean, wore a starfish costume to the meeting, while Ashkenazi wore a jersey belonging to former Indiana Pacers star Reggie Miller. CEO Sundar Pichai wore a black t-shirt that read “ERROR 404 COSTUME NOT FOUND” with an image of a pixelated dinosaur.

Ashkenazi said one of her top priorities in the new role would be to make more cuts as Google expands its spending on artificial intelligence infrastructure through 2025.

It’s a theme that started in 2023, when the economy and market turned around, and has continued ever since. Google has restructured its workforce to move faster in the AI ​​arms race, where it faces increasing competition. That’s included dismissed, organizational upheavaland has led to employees feeling a “Decline in morale,” as CNBC previously reported.

In recent months, Google has made cuts to its marketing, cloud and security teams in Silicon Valley, as well as its unity for trust and security.

Google is far from alone. Dropbox announced this week that this will happen dismiss 20% of the global workforce, while Amazon continues formwork various projects. Within Google, employees have expressed concern that the company is preparing for more layoffs, possibly after the end of the year, according to internal correspondence seen by CNBC.

Pichai joked that the quarterly call was perfect preparation for Ashkenazi ahead of the company meeting.

“I told Anat yesterday that earnings calls are a piece of cake compared to TGIF the next day,” Pichai said, drawing laughter from the audience.

Some employee comments and questions include praise for “another great quarter,” success in chip improvements, and improvements in Google’s popular AI note-taking tool NotebookLM. However, other questions raised fears about what greater cost efficiency would mean for the workforce.

“What exactly was meant by the comments about further efficiencies in the workforce”? one question was asked, referring to Ashkenazi’s comments of the call.

Ashkenazi shared no further details but said employees are “one of the most important assets we have.” She said the company is investing in people and hired 1,000 new graduates in the third quarter.

‘Extraordinary period of capital increase’

Pichai, who has been preaching efficiency for almost two years, echoed the sentiment of the past.

“If you have to do something new and it takes ten people, if you can find a way to do it with eight people by making smart decisions somewhere and better aligning teams, then that is also an example of finding efficiencies in the workforce. ,” Pichai said.

In response to another question about ongoing layoffs and reorganizations and what could happen in the future, Pichai said, “If we make company-wide decisions, we’ll be sure to let you know.”

He said the company is currently spending a lot of money on AI, but the need to ramp up those costs won’t last forever.

“We are going through an extraordinary period of capital investment,” Pichai said. “As you go through these technological shifts, you invest disproportionately in the earlier stages and then the curve gets better and that’s the transition we’re working through as an industry.”

He added that not all cuts are decided by top executives.

“It’s not like all these decisions are made centrally at the corporate level,” he said. “And so, at the scale of our business, there may be times when small groups of people are affected.”

Ashkenazi said Tuesday that one way to achieve greater cost efficiency is to use AI internally. The company said 25% of new code is now generated by AI.

In response to a question about productivity, Brian Saluzzo, head of ‘Core’ developers, said that while the 25% refers to low-level tasks, the leadership is in the midst of ‘expanding into more complex areas’ within the company .

“Core” refers to the teams that build the technical foundation that underpins Google’s flagship products. In May, CNBC reported that Google dismissed more than 200 employees from the Core engineering teams, in a reorganization that included rehiring a number of roles in India and Mexico.

Pichai continued by saying, “In this moment of transition, across all functions, across the business, it’s worth challenging us to think about where we can use AI to be more productive.”

He added that the workforce should “strive to do more” through 2025 and “help customers around the world leverage these lessons too.”