Google could become the next tech giant hit with workforce shake-ups after its CEO revealed plans to make the company 20% more efficient amid economic challenges.
In a speech at the recent Code Conference, Alphabet/Google CEO Sundar Pichai said he wants Google to run much more efficiently as it continues to grapple with recent market conditions. The company has been struggling with economic uncertainty and a slowdown in its ad spending.
Google is one of several tech firms to benefit greatly from ad spend. However, the company is now being forced to rethink its overall strategy.
"The more we try to understand the macroeconomic, [the more] we feel very uncertain about it," Pichai said. "The macroeconomic performance is correlated to ad spend, consumer spend and so on."
Pichai said he has no control over macroeconomic factors. However, he admitted that Google has become "slower" particularly after the company increased the size of the workforce.
"We want to make sure as a company, when you have fewer resources than before, you are prioritising all the right things to be working on, and your employees are really productive that they can actually have impact on the things they’re working on so that's what we are spending our time on," Pichai said.
Making Google more efficient
When Code Conference host Kara Swisher asked Pichai how he intends to make Google more efficient, the Alphabet CEO offered several insights.
“Across everything we do, we can be slower to make decisions,” Pichai said. "You look at it end-to-end and figure out how to make the company 20% more productive.”
Pichai also cited the aligning of YouTube Music and Google Play Music into a single product as an example of how he plans to achieve his goal.
“Sometimes there are areas to make progress [where] you have three people making decisions, understanding that and bringing it down to two or one improves efficiency by 20%,” he added.
The possibility of worker layoffs
Pichai’s comments at Code Conference raised concerns on whether his efficiency plan involves layoffs. However, Google has yet to make any announcements regarding it.
Before his Code Conference appearance, Pichai made headlines after he revealed his “Simplicity Sprint” initiative back in July. The internal project is designed to realign Google’s focus to allow it to “get better results faster”. The announcement came after the company posted weaker-than-expected earnings and revenue for a second straight quarter.
Google also faced heavy criticism earlier in the year after employees gave the company’s leadership poor grades on several aspects including pay, promotions, and execution. Workers took particular issue with Google’s growing bureaucracy, which even the tech giant’s executives were forced to acknowledge.
During an all-hands meeting in July, Google HR head Fiona Cicconi said that there were concerns about potential layoffs across the tech industry. However, she said that they were "not currently looking to reduce Google's overall workforce." Cicconi did later add: "we can't be sure of the economy in the future."