Google is delaying a portion of employee bonus checks
Google CEO Sundar Pichai speaks at a panel at the CEO Summit of the Americas hosted by the U.S. Chamber of Commerce on June 09, 2022 in Los Angeles, California.
Anna Moneymaker | Getty Images
Google executives are deferring a portion of employees’ year-end bonus checks, according to documents viewed by CNBC, as the company moves toward permanently pushing back payouts.
In past years, employees received their full bonuses in January. However, Google will pay qualifying full-time employees 80% of their bonus checks this month and the remaining 20% in March or April, the documents say. Payments in April would be in the second quarter, potentially allowing the company to spread out its costs.
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Google described the January payout as an “advance” in correspondence to employees. Leadership said it will be a one-time change due to “transition” of its employee-evaluation system and the altered timing for future bonuses.
“After 2023, full bonuses will be paid in March,” the company said in the memo.
Following publication of this story, a Google spokesperson told CNBC in an email, “This one-time 80% bonus advance was extensively communicated to employees in May 2022 and in subsequent communications since, as part of the transition to our new performance management timeline.”
The delayed payment comes as Google CEO Sundar Pichai seeks to reel in costs while still avoiding mass layoffs. Unlike large tech peers Meta, Microsoft and Amazon, Google parent Alphabet has thus far skirted significant job cuts and focused instead on eliminating lagging products and groups. Last week, Alphabet’s Verily health sciences unit said it will cut headcount by 15%, accounting for about 240 lost jobs, and the company also reduced staff in its robotics unit Intrinsic.
In the latter part of 2022, Alphabet canceled the next generation of its Google Pixelbook laptop, slashed funding to its Area 120 in-house incubator and said it would be shuttering its digital gaming service Stadia. Pichai said in September he wants to make the company 20% more efficient.
Meanwhile, Google has been overhauling its performance ratings system. The company recently released new details, showing a larger number of employees will more easily fall into lower-rated categories, CNBC reported last month. Employees said they feared it could be used as a way to reduce headcount without conducting layoffs.
Internal Google employee memes take on company’s bonus check deferrals.
Staffers also expressed concerns with the latest changes to bonus payments. Some told CNBC they weren’t aware of the partial deferment, and said they received little help internally as they tried to search for answers.
One graphic on Memegen, an employee meme generator, showed a split screen of Prince Harry and Meghan Markle, with a quote from Markle that’s edited to say, “Harry is adjusting great to Google” next to an image of a disturbed-looking Prince Harry with the text “Where the hell did 20% of my bonus go?”
Sources also described a meme with the text reading “Got my BONU,” referring to the realization that they didn’t receive their whole bonus as expected.
Alphabet is scheduled to report fourth-quarter earnings on Feb. 2. Analysts expect revenue growth of less than 2% from a year earlier, according to Refinitiv, while earnings per share is expected to drop to $1.18 from $1.53. The stock has dropped 31% in the past year.
Tik Tok creators gather before a press conference to voice their opposition to the “Protecting Americans from Foreign Adversary Controlled Applications Act,” pending crackdown legislation on TikTok in the House of Representatives, on Capitol Hill in Washington, U.S., March 12, 2024.
Craig Hudson | Reuters
The Supreme Court on Friday will hear oral arguments in the case involving the future of TikTok in the U.S., which could ban the popular app as soon as next week.
The justices will consider whether the Protecting Americans from Foreign Adversary Controlled Applications Act, the law that targets TikTok’s ban and imposes harsh civil penalties for app “entities” that continue to carry the service after Jan.19, violates the U.S. Constitution’s free speech protections.
It’s unclear when the court will hand down a decision, and if China’s ByteDance continues to refuse to divest TikTok to an American company, it faces a complete ban nationwide.
What will change about the user experience?
The roughly 115 million U.S. TikTok monthly active users could face a range of scenarios depending on when the Supreme Court hands down a decision.
If no word comes before the law takes effect on Jan. 19 and the ban goes through, it’s possible that users would still be able to post or engage with the app if they already have it downloaded. However, those users would likely be unable to update or redownload the app after that date, multiple legal experts said.
Thousands of short-form video creators who generate income from TikTok through ad revenue, paid partnerships, merchandise and more will likely need to transition their businesses to other platforms, like YouTube or Instagram.
“Shutting down TikTok, even for a single day, would be a big deal, not just for people who create content on TikTok, but everyone who shares or views content,” said George Wang, a staff attorney at the Knight First Amendment Institute who helped write the institute’s amicus briefs on the case.
“It sets a really dangerous precedent for how we regulate speech online,” Wang said.
Who supports and opposes the ban?
Dozens of high-profile amicus briefs from organizations, members of Congress and President-elect Donald Trump were filed supporting both the government and ByteDance.
The government, led by Attorney General Merrick Garland, alleges that until ByteDance divests TikTok, the app remains a “powerful tool for espionage” and a “potent weapon for covert influence operations.”
Trump’s brief did not voice support for either side, but it did ask the court to oppose banning the platform and allow him to find a political resolution that allows the service to continue while addressing national security concerns.
The short-form video app played a notable role in both Trump and Democratic nominee Kamala Harris’ presidential campaigns in 2024, and it’s one of the most common news sources for younger voters.
In a September Truth Social post, Trump wrote in all caps Americans who want to save TikTok should vote for him. The post was quoted in his amicus brief.
What comes next?
It’s unclear when the Supreme Court will issue its ruling, but the case’s expedited hearing has some predicting that the court could issue a quick ruling.
The case will have “enormous implications” since TikTok’s user base in the U.S. is so large, said Erwin Chemerinsky, dean of Berkeley Law.
“It’s unprecedented for the government to prohibit platforms for speech, especially one so many people use,” Chemerinsky said. “Ultimately, this is a tension between free speech issues on the one hand and claims of national security on the other.”
WATCH: It appears TikTok could really get shut down, says Jim Cramer
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