Google CEO says he hopes to make company ‘20% more’ efficient, hints at potential cuts

Alphabet CEO Sundar Pichai gestures during a session at the annual meeting of the World Economic Forum (WEF) in Davos, January 22, 2020.

Fabrice COFRINI | AFP | Getty Images

Google and Alphabet CEO Sundar Pichai said he wanted to make the company 20% more efficient and that could include workforce reductions as he reckoned with a host of economic challenges as well as years of rapid hiring.

Speaking at the Code conference in Los Angeles, Pichai gave more details on how he plans to run the business more efficiently in anticipation of economic uncertainty and a broader slowdown in advertising spending, of which Google has been the biggest beneficiary to date.

“The more we try to understand macroeconomics, the more we feel very uncertain about it,” Pichai said on stage Tuesday. “Macroeconomic performance is correlated with advertising spending, consumer spending, etc.,” he added.

Although he said he considered macroeconomic factors to be beyond his control, Pichai acknowledged that the company had become “slower” after its workforce increased.

“We want to make sure that as a company, when you have fewer resources than before, you prioritize all the good things to work on and that your people are really productive that they can actually make an impact. about the things they’re working on so that’s what we spend our time on.”

Host Kara Swisher asked the CEO how he plans to make the company more efficient, citing “Sprint of simplicity”, a recent internal project launched to refocus the growing company and “get better results faster,” as CNBC first reported in July. As revenues continue to grow, the effort came after the company reported its second straight quarter of weaker-than-expected profits and revenue.

However, before that, the employees at the beginning of the year especially gave the company management poor grades on pay, promotions and execution, citing the company’s growing bureaucracy, which executives acknowledged at the time.

“In everything we do, we can be slower in making decisions,” Pichai said Tuesday. “You look at it end to end and figure out how to make the business 20% more productive.”

Pichai also gave more specific examples of how he hopes to achieve this. He gave a past example of aligning YouTube Music and Google Play Music into one product.

“Sometimes there are areas to improve [where] you have three people making decisions, understanding that and reducing it to two or one improves efficiency by 20%,” he gave in another example.

Host Kara Swisher pointed to a common term associated with Google employees working at the company for a long time called “rest and vest,” which has been depicted on the six-season HBO drama.
“Silicon Valley”, which referred to a company similar to Google called Hooli.

Smiling, Pichai said he had never watched the popular show. “Too close to home,” he remarked. “You watch TV to relax.”

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