Google’s CEO Has “Concerns” About Productivity

A tightening economy has led to an industry-wide slowdown in growth, and Google's no different from the other tech giants.
Adam Rowe

Google's CEO Sundar Pichai raised concerns about the tech giant's productivity in a recent all-hands meeting, according to a CNBC report.

The news comes amid an industry-wide slowdown in tech growth: Amazon decreased its workforce by a whopping 99,000 employees since the first quarter of the year, while Meta and Apple have slowed their hiring.

Google hasn't laid off as many workers as Amazon yet, although it did cut dozens of Google Cloud support employees in March. Are Pichai's comments a sign that Google may take more drastic measures? Here's what we know.

Google's Concerned About Productivity

The news comes from Google parent company Alphabet's weekly all-hands meeting, in which Pichai said that productivity isn't where it needs to be based on the head count it currently has. In other words, people aren't pulling their weight.

According to CNBC, Pichai said that:

“There are real concerns that our productivity as a whole is not where it needs to be for the head count we have” and he asked employees to help “create a culture that is more mission-focused, more focused on our products, more customer focused. We should think about how we can minimize distractions and really raise the bar on both product excellence and productivity.”

Last week, the company reported a second consecutive quarter of weaker-than-predicting earnings and revenue — a sign that “productivity” in this case may translate to “profitability.”

Poor Economies Mean Profit-Oriented Companies

Google's investors may be shifting, some say, from a revenue-growth mindset to a profit-growth one. This could be due in part to the tightening economy making the latter a little harder to come by than the former.

And if so, that would explain the Google Cloud layoffs: Cloud services make a huge revenue, but cost so much to operate that they result in losses.

In a good economy, investors would be willing to wait until a profit appeared down the road. In 2022's economy, they want results now.

That theory aligns with fellow tech giant Amazon and its most recent profits statement. The company has lost money on ecommerce for the second quarter in a row, we recently learned. But it's making up those lost profits in other areas: fees from Prime customers and from marketplace sellers. Profits must be raised, and Amazon's own sellers offer a quick way to make a buck.

What's the takeaway here? Small businesses must be prepared for the cut-throat business models of 2022. Anything that doesn't earn a profit quickly won't receive support from those who hold the capital required to keep afloat.

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Adam is a writer at Tech.co and has worked as a tech writer, blogger and copy editor for more than a decade. He's also a Forbes Contributor on the publishing industry, for which he was named a Digital Book World 2018 award finalist. His work has appeared in publications including Popular Mechanics and IDG Connect, and he has an art history book on 1970s sci-fi coming out from Abrams Books in 2022. In the meantime, he's hunting own the latest news on VPNs, POS systems, and the future of tech.