Google tells employees more of them will be at risk for low performance ratings next year
CEO of Alphabet and Google Sundar Pichai during press conference at the Chancellery in Warsaw, Poland on March 29, 2022.
Mateusz Wlodarczyk | Nurphoto | Getty Images
More Google employees will be at risk for low performance ratings and fewer are expected to reach high marks under a new performance review system that starts next year, according to internal communications obtained by CNBC.
In a recent Google all-hands meeting and in a separate presentation last week, executives presented more details of its new performance review process. Under the new system, Google estimates 6% of full-time employees will fall into a low-ranking category that puts them at higher risk for corrective action, versus 2% before. Simultaneously, it will be harder to achieve high marks: Google projects 22% percent of employees will be rated with in one of the two highest categories, versus 27% before.
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As an example, in order to make the new, highest rated category, “Transformative Impact,” an employee must have “achieved the near-impossible” and contributed “more than we thought possible.”
Earlier this year, Google announced the new process for performance reviews, known as Google Reviews and Development, or GRAD.
But CNBC recently reported that employees have complained about procedural and technical issues with GRAD close to the year-end deadlines, making them anxious they won’t be accurately rated. The anxiety is compounded by a wave of layoffs in the tech industry. While Google has so far avoided the widespread job cuts that have hit other tech companies like Meta, employees have grown anxious if they could be next.
In a December all-hands meeting on the topic, employees expressed frustration with executives, who have long touted transparency but are not providing direct answers to questions about headcount. Some employees believe new performance review system might be a way for the company to reduce headcount.
Headcount has been a subject of employee concern throughout the latter part of 2022. CEO Sundar Pichai found himself on the defensive in September, as he was forced to explain the company’s changing position after years of supercharged growth. Executives said at the time that there would be small cuts, and they didn’t rule out layoffs.
And in November, a number of employees in an all-hands meeting asked for clarification on executives’ plans around headcount, and even asked if executives mismanaged headcount when Google grew its workforce by 24% year-over-year in Q3 2022.
As of Q3, the company employed 186,779 full-time employees. It also employs a similar amount of contractors.
Recent documents about the GRAD also say the company will be looking at bonuses, pay and equity and expects to “spend more per capita on compensation overall.” It also states the company still plans on paying within the top 5% to 10% of market rates.
Google did not immediately respond to a request for comment.
‘A lot of distress and anger’
At the company’s most recent all-hands meeting on Dec. 8, many of the top-rated questions described stress around year-end performance reviews, according to audio of the meeting obtained by CNBC. The questions also suggested some employees don’t trust the company’s leadership is being transparent in how it handles headcount.
“Why did Google push support check-in quotas to front line managers days before the deadline?,” one employee asked, in a question read aloud by Pichai. “I’ve been through a lot in Google in 5+ years but this is a new low.”
“It seems like a lot of last-minute support check-ins were forced through part of Cloud in order to meet a quota, causing a lot of distress and anger,” another employee asked. “With only two weeks to correct course, how is this helpful feedback? How do we prevent this from happening in the future?”
“The support check-in process is confusing, increasingly becoming a cause of stress and anxiety in Googlers, especially given the current economic situation and rumors around layoffs,” said another top-rated employee question.
Earlier this month, CNBC reported employees began receiving “support check-ins” often associated with lower performance ratings in the final days leading up to year-end deadlines. They also said executives changed parts of the process in the final days.
“I know it’s been bumpy,” Google’s chief people officer Fiona Cicconi, eventually said, briefly acknowledging the issues with GRAD in a recent all-hands meeting.
“It’s not ideal to have support check-ins occur so late in the review cycle and we know that people need time to absorb the feedback and take action on it,” admitted Cicconi, adding that “Googlers should have plenty of time to course-correct.”
Several employees also asked executives whether they had quotas for placing people in lower performance categories in order to reduce headcount in 2023. Even though executives said they don’t have quotas, it didn’t seem to convince employees.
One question asked executives if Google was becoming “a stack-ranking company like Amazon,” referring to the process of using quotas to place employees in certain performance buckets.
“Uncertainties around GRAD processes have been putting a lot of pressure on lower level managers to pass down information” about performance reviews and sometimes force “conflicting items,” another highly-rated question stated.
Another read: “Layoffs across the industry has been a topic impacting Googlers, raising stress, anxiety and burnout,” another read. There’s been no official comms on this, which raises even more concern around this. When will the company address this topic?”
But executives largely avoided answering the questions directly. CEO Sundar Pichai kept saying he “doesn’t know what the future holds.”
“What we’ve been trying hard to do is we are trying to prioritize where we can so we are set up to better weather the storm, regardless of what’s ahead,” Pichai said. “We really don’t know what the future holds so unfortunately I cannot make forward looking commitments but everything we’ve been planning on as a company for the past six to seven months has been do all the hard work to try and work our way through this as best as possible so, that’s all I can say.”
Hock Tan, CEO of Broadcom.
Martin H. Simon | Bloomberg | Getty Images
Broadcom shares soared 15% on Friday after the chipmaker said on its earnings call that it had secured a new $10 billion customer. Analysts quickly pointed to OpenAI.
Following a better-than-expected earnings report late Thursday, Broadcom CEO Hock Tan told analysts that a fourth large customer had put in orders for $10 billion in custom artificial intelligence chips, which the company calls XPUs.
“One of these prospects released production orders to Broadcom, and we have accordingly characterized them as a qualified customer for XPUs,” Tan said. He added that the order increased Broadcom’s forecast for AI revenue next year, when shipments will begin.
Analysts at Mizuho, Cantor Fitzgerald and KeyBanc all said they think AI startup OpenAI is the customer. The Financial Times reported on Thursday, citing people familiar with the partnership, that the two companies co-designed a chip that will hit the market next year.
OpenAI declined to comment on the report.
While Broadcom doesn’t name its large web-scale customers, analysts have said dating back to last year that its first three clients were Google, Meta and TikTok parent ByteDance.
“During the call, the company surprised us by noting that it had secured a $10B order from a fourth XPU customer (we believe this is OpenAI), adding significant upside to the company’s three current XPU customers (Google, Meta, and ByteDance),” analysts at Cantor wrote in a note late Thursday. “Shipments are expected to commence in 2026.”
Broadcom’s stock has been on a tear of late as the company has joined Nvidia at the front of the race to build the kinds of processors and infrastructures needed for massive AI workloads. The stock is up about 130% in the past year, lifting Broadcom’s market cap past $1.6 trillion.
For the fiscal third quarter, Broadcom reported earnings and revenue that topped estimates. The company said it expects $17.4 billion in fourth-quarter revenue, higher than the $17.02 billion expected by Wall Street analysts, with AI revenue reaching $6.2 billion.
But news of an incoming $10 billion customer is what got Wall Street excited.
Tan said on the call that “immediate and fairly substantial demand” boosts the outlook for next year, “and really changes our thinking of what 2026 would be starting to look like.”
The company didn’t provide specific guidance for next year, but Tan suggested that growth in its AI could be above the 50% to 60% range he’d offered in the prior call.
Analysts at Mizuho raised their AI revenue growth estimate for next year to 76% up from about 60%, which would bring the total to $35 billion. Total revenue for the year ending in October 2026 is expected to increase about 30% to $81.8 billion from $63.1 billion this fiscal year, according to analysts surveyed by LSEG.
In addition to hardware, Broadcom has a large software business, keyed by its $61 billion acquisition of server virtualization software vendor VMware in 2023. Revenue in the infrastructure software business, which includes VMWare, rose 43% to $6.79 billion.
— CNBC’s Kif Leswing contributed to this report.
WATCH: Broadcom shares spike
Tesla is asking investors to approve yet another outsized pay plan for CEO Elon Musk, according to a financial filing out Friday.
The total package is worth about $975 billion based on the maximum payout, assuming share count remains.
The proposed plan for Musk, already the world’s wealthiest individual, consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade. It would also give Musk increased voting power over the EV maker and aspiring robotics titan, which he has publicly demanded since early 2024.
Tesla Chairwoman Robyn Denholm told CNBC’s Andrew Ross Sorkin the plan was designed to keep the CEO “motivated and focused on delivering for the company.”
“If he performs, if he hits the super ambitious milestones that are in the plan then he gets equity — it’s 1% for each half a trillion dollars of market cap, plus operational milestones he has to hit in order to do that,” Denholm said on CNBC’s “Squawk Box.”
The full award would give Musk more than 423 million additional shares. He currently holds about a 13% stake in the company.
Tesla one-day stock chart.
Denholm confirmed that the Tesla CEO pay plan, if approved by shareholders, would not put any limit on where and how Musk spends his time or require him to spend any minimum number of hours per week on Tesla business.
To obtain the first award in the plan, Musk and Tesla would need to almost double their current market cap to reach $2 trillion. The final benchmark is reaching an $8.5 trillion market cap.
The operational milestones in the 2025 CEO Performance Award include: 20 million Tesla vehicles delivered, 10 million active FSD Subscriptions, 1 million robots delivered, 1 million Robotaxis in commercial operation and a series of adjusted EBITDA benchmarks.
Musk has remained politically embroiled, while also running a collection of companies, including aerospace and defense contractor SpaceX, drilling venture The Boring Company, health tech company Neuralink and the artificial intelligence venture, xAI, which has merged with his social network, X.
Tesla also said in the filing Friday that it will ask shareholders at the Nov. 6 meeting to vote on whether the company should invest in Musk’s newest venture, xAI.
Musk first floated the idea publicly with an informal poll on X last July, asking whether Tesla should invest $5 billion into xAI.
Founded in early 2023 in Nevada, xAI merged with Musk’s social network X earlier this year. The company now operates a massive data center in Memphis, and plans to build out another facility there to help train and run its large language models and a chatbot called Grok.
Pay plan controversy
The new pay proposal for Musk comes after the Delaware Court of Chancery ruled last year that his 2018 pay plan was excessive, had been improperly granted by the Tesla board and must be rescinded.
In that case, Tornetta v. Musk, a judge found that the Tesla CEO had controlled pay negotiations at the automaker, and his board of directors failed to give shareholders information that they were legally entitled to before telling them they should vote to approve Musk’s performance-based pay plan.
The case is now on appeal.
OpenAI CEO Sam Altman (L) attends a meeting of the White House Task Force on Artificial Intelligence Education in the East Room of the White House on September 04, 2025 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images
OpenAI has announced it is developing an AI-centered jobs platform as part of broader efforts to expand AI literacy, and as the company grows its consumer and business-facing AI applications.
The ChatGPT maker’s “OpenAI Jobs Platform” will utilize AI to help connect qualified job candidates to companies, which could put it in competition with Microsoft’s LinkedIn.
OpenAI and Microsoft have an uneasy partnership, with Microsoft formally labeling the AI startup as a competitor in search and news advertising in its annual filing last year. Microsoft is OpenAI’s biggest investor, having reportedly poured $13 billion in the company.
The news was announced by Fidji Simo, chief executive officer of applications and the former head of Instacart, in a blog post on Thursday.
“Importantly, the jobs platform won’t just be a way for big companies to attract more talent. It will have a track dedicated to helping local businesses compete, and local governments find the AI talent they need to better serve their constituents,” Simo said.
She didn’t elaborate further on details regarding the platform, but a company spokesperson told TechCrunch that it expects to launch the service by mid-2026.
Additionally, OpenAI will introduce a new certification program in connection with its “OpenAI Academy,” an online learning platform that teaches workers how to use AI on the job better. This could also put it in competition with LinkedIn’s learning platform, which also offers video courses across business, technology and creative fields, with certifications.
“[W]e’re going to expand the Academy by offering certifications for different levels of AI fluency, from the basics of using AI at work all the way up to AI-custom jobs and prompt engineering,” Simo said, adding that the program will utilize ChatGPT’s Study mode. The study feature turns the chatbot into a teacher that questions, hints and provides feedback, instead of giving direct answers.
Organizations will be able to make the certificate part of their own learning and development programs, with OpenAI already working with Walmart, the largest private employer in the U.S. OpenAI said it plans to certify 10 million Americans by 2030.
The plans come amid fears about how AI is impacting the labor market. Business leaders like Salesforce’s Marc Benioff have recently announced layoffs due to AI, while new studies have linked the technology to mass job loss for certain workers.
Simo acknowledged the “disruptive” force of AI in her post, saying jobs and companies will look different and need to adapt.
“[W]hat we can do is help more people become fluent in AI and connect them with companies that need their skills, to give people more economic opportunities.
Recent research from labor market data company Lightcast found that roles that require AI skills pay higher salaries on average than those that don’t.
The new initiatives were also said to come as part of OpenAI’s “commitment to the White House’s efforts toward expanding AI literacy.”
The company has been strengthening ties with Washington, launching a new offering called OpenAI for Government on June 16, the same day it was awarded a contract of up to $200 million by the U.S. Department of Defense. OpenAI is also part of the $500 billion Stargate project, which aims to invest in AI infrastructure in the U.S. over the next four years.
OpenAI CEO Sam Altman was part of a group of tech leaders that met with U.S. President Donald Trump on Thursday to discuss topics including the development of artificial intelligence.
Before the dinner, first lady Melania Trump made a speech highlighting the importance of AI in education and American progress, but that “we must manage AI’s growth responsibly.”
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