Here’s What Google, Meta and Co Have Cut to Save Costs

The world's most powerful tech companies have all cut costs already this year - but can anything stem the dire economic tide?

After overstretching during the pandemic while profits were booming, the world’s biggest tech companies have been brought resoundingly back down to earth by the financial hardships rapidly engulfing the global economy in 2023.

The likes of Meta and Amazon have resorted to making mass layoffs and giving up thousands of square feet of office space since the new year, while social media network Twitter has implemented some strange cost-cutting measures in recent times, including desperately pleading for reduced contractual terms with vendors.

Joining the doom and gloom this week, Google also announced cuts to employee services and perks will be taking place soon. So, we’ve had a closer look at how the Tech giant – as well as its rivals – are cutting costs this year.

Google: Staple Things Less, Please

One of Google’s objectives for 2023 is to “deliver durable savings through improved velocity and efficiency”, a recent internal email from company CFO Ruth Porat said. 

As part of this cost-cutting drive, a number of employee perks and services are going to be taken away, reports suggest. For instance, employees used to be able to expense a mobile phone even if there was one internally available – but now, this service is no longer possible.

Staff that would've been given MacBooks upon starting will now receive a Chromebook instead, with the more powerful devices reserved for engineering teams. Company cafes are set to close on quieter days such as Mondays and Fridays, while end-of-week yoga classes were identified as another “underutilized” perk at Google that could be scrapped.

“We set a high bar for industry-leading perks, benefits, and office amenities, and we will continue that into the future… however, some programs need to evolve for how Google works today” Ruth Porat, Google CFO.

Other measures include asking employees to share desks, while a facility directive for employees in San Francisco instructed that staplers and tape must now be drip-fed to employees by receptionists.  However, a Google spokesperson told CNBC that “staplers and tape continue to be provided to print stations. Any internal messages that claim otherwise are misinformed.″

These decisions are being implemented alongside the 12,000 layoffs that were announced back in January, representing 6% of Google's workforce. 

Twitter: We Can't Pay, but We Could Plead for Help

It’s a wonder why no other company has tried Twitter’s failsafe method of cutting costs that hit the headlines in December of last year: refusing to pay their rent

The Financial Times reports that Pablo Mendoza, a managing director at a Dubai-based investment firm that contributed $700m to Musk's acquisition of the platform, has resorted to pleading with vendors that “his job is on the line”, negotiating 50 – 90% reductions in some cases.

In what seemed like an act of desperation, several items from Twitter’s offices were put up for auction in mid-January, including a pizza oven and the social media network's famous bird statue.

These sorts of tactics already look like they’re backfiring, however, as the refusal to pay Twitter’s bills has wrapped the social network up in a multi-million dollar legal quagmire, with nine separate lawsuits looming.

To make matters worse, these ‘measures' are being implemented against a backdrop of almost-constant layoffs, with three-quarters of the company’s pre-acquisition payroll no longer working for the company. Some were made redundant, while others were offered “voluntary separation” from Twitter.

Meta: Fewer Employees, Fewer Costs

At the beginning of February, Mark Zuckerberg announced that 2023 would be Meta’s “year of efficiency” – and he wasn’t wrong. 

In February, a cull of middle managers – referred to internally as the “flattening” – was initiated, with many told to move to an “individual contributor” role or leave the business. 

Then, Meta announced 10,000 layoffs in mid-March, taking the total number of employees made redundant in the last six months to over 21,000. 

Meta is also leaving vacant positions open instead of filling them – with recent reports suggesting that the company is leaving as many as five thousand positions unfilled to bring salary outgoings down.

Apple: Less Travel, More Pay Cuts

Apple has perhaps been the big tech company least affected by the economic downturn, largely due to its $165 billion worth of cash reserves, while Bloomberg says stock is up around 20% this year.

Despite this, the company has still implemented a number of cost-cutting measures, including delaying bonuses, pushing back projects like the HomePod to 2024, and reducing team budgets across the company.

Other tactics include limiting the ability of Apple's workforce to transfer between locations, reducing employee travel, and simply leaving roles open when employees leave, as Meta has done.

Ever a man of the people, CEO Tim Cook requested that he take a pay cut himself this year, and plans to take home 40% less than he did in 2022 – leaving him with a mere $49 million.

Microsoft: So Long, Office Spaces

Like Apple, Microsoft has been restricting company gatherings and travel since the summer of 2022 – but the company is also going for the multi-pronged cost-cutting approach.

In January 2023, it was revealed that Microsoft was planning to let go of 1.7 million square feet of office space in an attempt to rein in costs and consolidate “to create higher density across our workspaces”.

Its biggest cost-cutting measure of 2023 so far, however, was laying off over 10,000 employees just after the new year, just days after offering staff unlimited paid time off

This itself could be a cost-cutting measure, as it helps companies avoid paying out for unspent holidays when staff members leave. 

Amazon: It's the Little Things That Matter

Amazon has implemented a number of smaller cost-cutting measures over the past few months, with the need to save affecting almost every area of the business.

The company has already sublet and leased office space the company isn’t using, including 65,000 square feet in Bengaluru, India just this week.

A smaller measure has been to allow sellers to store their inventory in Amazon warehouses for longer periods of time.

The ecommerce behemoth also started giving third-party companies access to its logistics network in the name of quicker order fulfilment. Some Amazon Go stores in parts of the US, such as Seattle, have been closed too. 

Of course, the company's wage budget will be significantly smaller – Amazon announced plans to lay off 18,000 employees in January 2023.

The Cost-Cutting Chaos Will Continue

Unfortunately for everyone working in the tech industry, this won't be the last we hear of layoffs and other ruthless cost-cutting measures. More perks, pay, and physical office spaces are likely to be given up as the year trundles on.

Uncertain economic times provide new challenges for companies constantly in the spotlight, with heightened scrutiny over every dollar spent. Projects like Meta's Metaverse, for instance, have been consistently framed as failures in recent weeks as the company flounders financially.

Which decision-makers and key players will come out unscathed remains to be seen – but Mark Zuckerberg and Amazon's Andy Jassy have certainly seen their personal stock tank and employee unrest increase in the past few months.

Whatever happens, it's unlikely restricting staplers and tape will be the most leftfield attempt to save a bit of cash we see in 2023.

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Written by:

Aaron Drapkin is a Lead Writer at Tech.co. He has been researching and writing about technology, politics, and society in print and online publications since graduating with a Philosophy degree from the University of Bristol five years ago. As a writer, Aaron takes a special interest in VPNs, cybersecurity, and project management software. He has been quoted in the Daily Mirror, Daily Express, The Daily Mail, Computer Weekly, Cybernews, and the Silicon Republic speaking on various privacy and cybersecurity issues, and has articles published in Wired, Vice, Metro, ProPrivacy, The Week, and Politics.co.uk covering a wide range of topics.

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