Alphabet (Google) Faces Internal Morale Crisis Despite Record Earnings. All-Hands Meeting Report.

Google Faces Internal Morale Crisis
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During a recent all-hands meeting at Alphabet, Google’s parent company, executives faced tough questions from employees concerned about low morale, despite the tech giant achieving a market cap exceeding $2 trillion. Employees highlighted a “significant decline in morale, increased distrust, and a disconnect between leadership and the workforce,” questioning the steps leadership would take to restore the company’s foundational trust and cohesion.

Amid these concerns, employees also raised issues about compensation not reflecting the company’s financial success, particularly given Alphabet’s record earnings. The questions pointed to the lack of meaningful compensation increases, even as the company boasted more than $100 billion in cash reserves. Alphabet’s CFO, Ruth Porat, responded by emphasizing growth as a priority, acknowledging past missteps where expenses outpaced revenues, a situation she described as unsustainable.

In response to the financial misalignment, Alphabet initiated significant job cuts starting in 2023, with 12,000 positions eliminated and several subsequent rounds of layoffs. These cuts coincided with hiring in more cost-effective international markets. Alphabet CEO Sundar Pichai attributed these measures to correcting over-hiring during the COVID-19 pandemic and insisted that the company is moderating its expense growth, despite strong financial results.

Pichai hinted that while the scale of job cuts might decrease in the latter half of the year, the company would remain disciplined in managing headcount. As Alphabet navigates these operational adjustments, the impact on employee morale continues to be a critical concern, with many feeling the effects of the company’s strategic realignments.

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