Google, one of the world’s largest technology companies, has announced its plans to cut costs by reducing employee perks and services to meet its savings target. The company is specifically looking to reduce incentives and perks like free snacks, shuttle services, and fitness sessions, which it currently offers to its employees. The move is part of Google’s efforts to improve efficiency and profitability, while also investing in new technologies such as generative artificial intelligence.
Google’s CFO, Ruth Porat, has informed employees that the company will adjust its office services to align with its new hybrid culture, which has been adopted due to the COVID-19 pandemic. One of the company’s key objectives is to deliver durable savings through improved velocity and efficiency. To achieve this, cafes, micro-kitchens, and other facilities will be tailored to better match how and when they are being used. For example, if a cafe is seeing lower usage on certain days, the company will close it on those days and focus its resources on other areas.
Google is making these changes based on data to ensure that it is making the right decisions. The company’s CFO said that “this work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward — particularly in AI.” She added that the company will consolidate micro-kitchens in buildings where they see more waste than value, and shift some fitness classes and shuttle schedules based on how they are being used.
In addition to reducing employee perks and services, Google is also cutting costs on general office accessories and equipment, such as staplers, tapes, and laptops. Devices now have a longer lifespan and greater performance and reliability, which has enabled the company to make these changes. Furthermore, Google is looking to improve its external procurement processes from software to equipment to professional services to save money.
The company has already implemented previous layoffs across different departments, making 12,000 staff redundant in January, about 6% of its nearly 190,000 employees, after a review across product areas and functions. Google has also cancelled its next-generation Pixelbook laptop and permanently closed its cloud-gaming service Stadia to cut costs. These cost-cutting measures are expected to help the company improve its financial performance while continuing to invest in new technologies.
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