Sundar Pichai says fun isn’t all about money, while defending cost cutting at Google

The big switch to work from home had helped Google to save $1 billion every year, as spending on travel bills for employees and other expenses went down. But despite that, the search engine giant further decided to cut salaries of the staff who opted for remote working, late last year. Responding to questions about such accelerated cost cutting, Alphabet CEO Sundar Pichai is telling employees to not equate fun with money.

Asks employees to remember Google’s humble beginnings

Addressing the concerns about cutting perks that made Google employee-friendly, Pichai added that people should remember when it used to be a small firm. He said that people at a hard-working startup might also be having fun, and that it isn’t always about money. The assertion comes after Alphabet reported lower than expected revenue for two straight quarters, while profit dipped by 14 per cent in the second quarter of 2022.

After Pichai warned of economic headwinds when the results were announced in July, Google reduced funding for its incubator called Area 120, while cancelling the new version of its laptop, the Pixelbook. The fund cuts triggered speculation about possible layoffs, which has affected overall performance of employees. The growth of Google’s advertising business, which brings in the bulk of revenues, has also slowed down because of inflation and an imminent recession.

Justifying frugality with macroeconomic conditions

The Alphabet CEO further added that no one gets to choose macroeconomic factors, and that the company needs to pull together to withstand challenges. He told employees that Google’s investment in big long-term projects such as the quantum computer hasn’t stopped, and it just needs to be frugal to increase efficiency.

Google’s sales growth is expected to fall further in the third quarter of 2022, after its cloud business posted an $858 million loss in July. To this Pichai had responded by saying that the market is still in its early stage of growth, and poses an opportunity for Google Cloud.

Cost cutting measures at Google are being seen as a part of alterations to its work culture, and the salary reductions for remote working staff were also criticised by the company’s former HR chief.