Google’s finance chief Ruth Porat sent a company-wide email outlining “durable savings” as a key objective for the company in 2023. As a part of this goal, Google is making significant cuts to employee services, including fitness classes, staplers, tape, and laptop replacements.
“These are big, multi-year efforts,” she said in the email, titled “Our company-wide OKR on durable savings,” adding that “all PAs and Functions are working toward this,” Porat said.
The move is part of the company’s most severe era of cost cuts in almost two decades as a public company, and the email states that these cuts are some of the hardest decisions the company has had to make.
Porat said the cost-cutting measures were necessary because of Google’s growth and the economic environment and referred to the company’s similar efforts in 2008.
“We’ve been here before,” the email stated. “Back in 2008, our expenses were growing faster than our revenue. We improved machine utilization, narrowed our real estate investments, tightened our belt on T&E budgets, cafes, micro kitchens, and mobile phone usage, and removed the hybrid vehicle subsidiary.”
The company is making practical changes to ensure that it remains a responsible steward of its resources while continuing to offer industry-leading perks, benefits, and amenities. As part of this, Google is pausing refreshes for laptops, desktop PCs, and monitors, and it is changing how often equipment is replaced. In addition, Google employees who are not in engineering roles but require a new laptop will receive a Chromebook by default, and employees can no longer expense mobile phones if one is available internally.
Google is also cutting some availability of employee services, such as food, fitness, massage, and transportation programs that were designed for when employees were coming in five days a week. Now that most employees are in the office only three days a week, some facilities are underutilized, and Google may close cafes on Mondays and Fridays.
Overall, Google is making significant cuts to employee services as part of a larger effort to achieve “durable savings” and improve efficiency.
While the company will continue to offer industry-leading perks and amenities, some programs need to evolve to reflect how Google works today.
This shift represents a difficult but necessary decision for the company in light of its recent growth, challenging economic environment, and investment opportunities to drive technology forward.