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Google’s CEO has told his staff “don’t equate money with fun” while he pushed for cost-cutting measures that would see “modest” holiday parties at the tech giant this year.
Sundar Pichai told employees angry about recent cuts to travel and entertainment budgets, as well as potential layoffs, that the company was preparing for tough economic times, according to leaked audio of a company meeting obtained by CNBC.
“We shouldn’t always equate fun with money,” Pichai, who earns an estimated $6.3 million in salary a year and an estimated $1.31 billion worth, told workers angrily about losing their benefits.
“We are committed to taking care of our employees,” he added. “I think we’re just going through a difficult moment macroeconomically, and I think it’s important that we as a company are aligned and working together.”
The billionaire’s CEO added that hiring and investment at Google will slow just a week after the company canceled its next-generation laptop and reorganized 50 employees following major cuts to its incubator program.
Google CEO Sundar Pichai warned employees ‘don’t equate money with fun’ as he said the company would be committed to saving money in tough economic times
Google’s chief of finance also urged employees to prepare for smaller holiday parties this year and told employees to “try not to go over the top.” In 2014, the company’s holiday party included a Cirque du Soleil performance at the Computer History Museum in Mountain View, California
That same year, the company held another Indiana Jones-themed holiday party (above) at the Maya nightclub in Los Angeles.
To save money, Kristine Reinke, Google’s chief financial officer, told employees to temper their expectations for the upcoming holiday season.
“We definitely want people to still have fun,” she said. “We know there are holiday parties, there are year-end parties, we still want people to do that.
“But we’re just asking them to keep them small, to keep them casual — don’t try to go over the top.”
In 2018, Google held its ‘Out of This World’ holiday party, catering for 6,000 people, dancing mirror ball robots and Star Wars stormtroopers playing ballet.
Natasha Miller, whose company hosted the event for Google, told Business Insider that holiday parties held by tech companies in Silicon Valley can range from $50,000 to $1 million.
Google employees had asked Pichai why the company “was hurting employees” by slashing their travel and entertainment budgets when “Google has record profits and huge cash reserves.”
Google’s parent company, Alphabet, posted revenue of $69.69 billion at the end of its June second fiscal quarter, up 12 percent from last year.
However, fears of an impending recession triggered by rising federal interest rates have sent major tech companies like Alphabet and Meta on high alert, with the former seeing more than 13 percent fall in share value in the past month.
Pichai said it was necessary for the company to re-evaluate its spending, but detested the idea it was engaging in “aggressive cost-cutting.”
Despite revenue growth in June, Google’s parent company Alphabet continued to plunge its shares amid fears of a recession
During the meeting, Pichai also played out or completely ignored questions about his own income and expenses.
With the company’s travel budget limited for large business purposes, an employee asked about the CEO’s decision to come to New York for their “Thank God It’s Friday (TGIF)” meeting.
“It’s an interesting choice for Sundar to be in New York for TGIF the week after employee travel has been reduced to only the most business-critical,” the employee asked. “I’m sure Sundar has mission-critical meetings in New York.”
‘I think so. I think it’s qualified,” Pichai said.
The CEO then avoided a demand that aimed to reduce costs by lowering executive compensation.
Pichai reportedly made $6.3 million last year, while other executives brought in a combined salary of more than $28 million. Earlier this year, Google increased its base executive salary from $650,000 to $1 million.
In a statement about the meeting, a Google spokesperson said: “Sundar has been consistently talking with the company over the past few months about ways we can focus more.”
Mark Zuckerberg, 38, is seen in Los Angeles on Sept. 15 after learning his net worth has fallen by $71 billion so far this year as his company aims to cut costs by at least 10%
The change in Google comes just two days after Facebook’s parent company Meta announced it aims to cut costs by at least 10 percent in the coming months through staff reductions and department reorganizations.
The social media company has been able to push some staffers out by rearranging its departments and giving affected employees a 30-day period to apply for other positions in the company.
The process allows the company to reduce employee costs while avoiding the issuance of pink slips as it weighs options in the future.
Meta-executives recently discussed the need for “ruthless prioritization” within the company, saying that staff freezing is necessary, although they avoided the word “fired” at the time.
CEO Mark Zuckerberg’s net worth is tied up in Meta stock, and since it’s fallen 58% this year, he’s lost $71 billion of his fortune.