Sundar Pichai, the CEO of Google and Alphabet, stated that the firm needs to become 20% more efficient, which may entail reducing employment as it deals with a number of economic issues in addition to years of rapid recruiting.
Pichai provided more information about how he plans to make the business function more effectively in advance of economic uncertainties and a general slowdown in ad expenditure, of which Google has so far benefited the most, while speaking at the Code Conference in Los Angeles.
“The more we try to understand the macroeconomic, we feel very uncertain about it,” Pichai stated on stage on Tuesday. “The macroeconomic performance is correlated to ad spend, consumer spend and so on,” he added.
Pichai said the company has been “slower” as a result of its increased staff even though he claimed he regards macroeconomic reasons as being outside of his control.
“We want to make sure as a company, when you have fewer resources than before, you are prioritizing 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.”
Using “Simplicity Sprint,” a recent internal initiative established to refocus the expanding company and “get better results faster,” as first reported by CNBC in July, host Kara Swisher questioned the CEO how he intended to make the business more efficient. Although sales is still increasing, the effort was made after the company revealed that its profitability and revenue fell short of expectations for the second straight quarter.
Prior to it, however, staff members had given the organization’s leadership particularly poor grades on compensation, promotions, and execution, noting the rising bureaucracy within the company—which executives at the time acknowledged—as well as the company’s management’s failure to address it.
“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 provided more detailed illustrations of how he intends to do it. He provided an earlier example of how Google Play Music and YouTube Music were combined into one offering.
“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 continued with another illustration.
The six-season HBO drama “Silicon Valley,” which included a fictional Google-like corporation named Hooli, used a phrase commonly used by Google employees who have worked there for a long time called “rest and vest.” Kara Swisher, the show’s host, noted the phrase.
Pichai said he never watched the well-liked program while grinning. “Too close to home,” he remarked. “You watch TV to relax.”