Google‘s CEO has told his staff ‘not to equate money with fun’ while addressing cost-cutting measures that would see ‘modest’ holiday parties this year at the tech giant.
Sundar Pichai told employees angered about recent cuts to travel and entertainment budgets, as well as potential layoffs, that the company was preparing for tough economic times, according to leaked audio of a company meeting obtained by CNBC.
‘We shouldn’t always equate fun with money,’ Pichai, who’s estimated worth is $1.31 billion, told employees upset at losing their perks.
‘We’re committed to taking care of our employees,’ he added. ‘I think we’re just working through a tough moment macroeconomically, and I think it’s important we as a company align and work together.’
The billionaire CEO added that hiring and investments will slow at Google, which comes just a week after the company canceled its next-generation laptop and reorganized 50 employees following major cuts to its incubator program.
Google CEO Sundar Pichai warned employees ‘not to equate money with fun’ as he said the company would be committed to saving money amid tough economic times
Google’s head of finance also urged employees to prepare for smaller holiday parties this year, telling employees ‘try not to go over the top.’ In 2014, the company’s holiday party included a Cirque du Soleil performance at the Computer History Museum in Mountain View, California
That same year, the company held another holiday party themed after Indiana Jones (above) at The Mayan nightclub in Los Angeles
In order to save money, Kristine Reinke, head of Google’s finance, told employees to temper their expectations for the coming holiday parties.
‘We definitely want people to still have fun,’ she said. ‘We know there’s holiday parties coming up, there’s year-end celebrations, we still want people to do that.
‘But we’re just asking them to keep them small, keep them informal — try not to go over the top.’
In 2018, Google held it’s ‘Out of This World’ holiday party, which featured catering for 6,000 people, dancing mirror-ball robots, and Stormtroopers doing ballet.
Natasha Miller, whose company organized the event for Google, told Business Insider that holiday parties held by Silicon Valley tech companies can range from $50,000 to $1 million.
Google staff had asked Pichai why the company was ‘nickel-and-diming employees’ by slashing their travel and entertainment budgets when ‘Google has record profits and huge cash reserves.’
Google’s parent company, Alphabet, recorded $69.69 billion in revenue at the end of the second fiscal quarter this June, up more than 12 percent from last year.
However, fears of an upcoming recession triggered by rising federal interest rates have put large tech companies like Alphabet and Meta on high alert, with the former seeing more than a 13 percent drop in stock value over the past month.
Pichai said it was necessary for the company to re-evaluate its spending, but resented the idea that it was engaging in ‘aggressive cost saving.’
Despite posting a growth in revenue in June, Alphabet, Google’s parent company, has continued to see its stock plummet amid fears of a recession
During the meeting, Pichai also played off or completely ignored questions about his own earnings and spending.
With the company’s travel budget now restricted for major business use, one employee asked about the CEO’s decision to come to New York for their ‘Thank God It’s Friday (TGIF) meeting.
‘It’s an interesting choice for Sundar to be in New York for TGIF the week after travel for employees is cut to only the most business-critical,’ the employee’s question read. ‘I’m sure Sundar has business-critical meetings in New York.’
‘I think so. I think it qualified,’ Pichai responded.
The CEO then avoided a question taking aim at cutting costs through the reduction of executive compensations.
Pichai reportedly earned $6.3 million last year, while other executives raked in a combined salary of more than $28 million. Earlier this year, Google bumped its baseline salary for executives from $650,000 to $ 1 million.
In a statement regarding the meeting, a Google spokesperson said: ‘Sundar has been speaking to the company consistently over the last few months about ways we can be more focused.’
Mark Zuckerberg, 38, is seen on September 15 in Los Angeles after learning his wealth has dropped by $71 billion so far this year as his company aims to cut costs by at least 10%
The change in Google comes just two days after Facebook‘s parent company Meta announced it is aiming to cut expenses by at least 10 percent over the next few months through staff reduction and reorganizing departments.
The social media company has been able to push out a number of staffers by reshuffling its departments and giving employees who are affected a 30-day window to apply for other roles in the company.
The process allows the company to reduce the cost of employees while avoiding the issuance of pink slips as it weighs options going forward.
Meta executives recently discussed the need for ‘ruthless prioritization’ within the company and said hiring freezes are necessary, though at the time they avoided using the word ‘layoffs.’
CEO Mark Zuckerberg’s wealth is tied up in Meta stock, and as it is down 58% this year, he has lost $71 billion of his fortune.