Google asks some employees to share desks amid office downsizing
Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum annual meeting in Davos.
Fabrice Coffrini | AFP | Getty Images
Google is asking cloud employees and partners to share their desks and alternate days with their desk mates starting next quarter, citing “real estate efficiency,” CNBC has learned.
The new desk-sharing model will apply to Google Cloud’s five largest U.S. locations — Kirkland, Washington; New York City; San Francisco; Seattle; and Sunnyvale, California — and is happening so the company “can continue to invest in Cloud’s growth,” according to an internal FAQ recently shared with cloud employees and viewed by CNBC. Some buildings will be vacated as a result, the document noted.
“Most Googlers will now share a desk with one other Googler,” the internal document stated, noting they expect employees to come in on alternate days so they’re not at the same desk on the same day. “Through the matching process, they will agree on a basic desk setup and establish norms with their desk partner and teams to ensure a positive experience in the new shared environment.”
The FAQ says employees may come in on other days, but if they’re in on an unassigned day, they will use “overflow drop-in space.”
Internally, leadership has given the new seating arrangement a title: “Cloud Office Evolution” or “CLOE,” which it describes as “combining the best of pre-pandemic collaboration with the flexibility” of hybrid work. The new workspace plan is not a temporary pilot, the document noted. “This will ultimately lead to more efficient use of our space,” it said.
Google also used its internal data it has on it its employee office return patterns to inform the decision, the FAQ stated. In addition to slower office return patterns, the company has slowed hiring and laid off 11,000 employees in January.
Memes started showing up in the company platform Memegen, poking fun at the change — specifically targeting the “corpspeak” used by leadership to tout the new desk arrangement in what they viewed to be a cost-cutting measure.
“Not every cost-cutting measure needs to be word mangled into sounding good for employees,” one popular meme read. “A simple ‘We are cutting office space to reduce costs’ would make leadership sound more believable.”
A Google spokesperson explained, “Since returning to the office, we’ve run pilots and conducted surveys with Cloud employees to explore different hybrid work models and help shape the best experience. Our data show Cloud Googlers value guaranteed in-person collaboration when they are in the office, as well as the option to work from home a few days each week. With this feedback, we’ve developed our new rotational model, combining the best of pre-pandemic collaboration with the flexibility and focus we’ve all come to appreciate from remote work, while also allowing us to use our spaces more efficiently.”
The move comes as Google downsizes its real estate footprint amid broader cost-cutting. However, it hasn’t yet specified regions or buildings it plans on downsizing.
In its fourth-quarter earnings call, Google executives said it expects to incur costs of about $500 million related to reduced global office space in the current quarter, and warned that other real estate charges are possible going forward. Earlier this month, SFGate reported the company will be ending leases for “a number of unoccupied spaces” in the San Francisco Bay Area, the region where its headquarters are located.
The cloud unit, which makes up more than a quarter of Google’s full-time workforce, is among the highest-growth areas at the company, but is not profitable.
In the fourth quarter, Google Cloud brought in $7.32 billion, growing 32% from the prior year, considerably faster than the company’s overall growth rate of less than 10%. But that revenue figure was less than Wall Street consensus expected, and the Cloud unit is still losing hundreds of millions of dollars every quarter — $480 million in the fourth quarter, although that was nearly half of the loss a year prior.
Overall, however, Google earned $13.62 billion in net income during the quarter, and $59.97 billion for all of 2022. Both were significant drops from 2021.
Welcome to the ‘neighborhood’
Under the new arrangement, teams of 200 to 300 employees “and partners” will be organized into “neighborhoods” that may also include “partner teams that are a part of other organizations, such as Finance, People Operations, etc.,” the FAQ read. Each neighborhood will have a vice president or director who will be responsible for allocating space in the neighborhood.
Employees will generally alternate days they’re in the office, either Monday and Wednesday, or Tuesday and Thursday. They will be in two days a week, a change from the company requiring employees to come in three days a week.
“Neighborhood leads are encouraged to set norms with their teams around sharing desks, ensuring that pairings of Googlers have conversations about how they will or will not decorate the space, store personal items, and tidiness expectations.”
In addition, the FAQ said that employees with computer workstations will no longer have those workstations located directly under their desks, but instead will have to look up its location in a database or put in a ticket for troubleshooting. Over time, employees are expected to transition to CloudTop, a virtual desktop tool that’s so far reserved only for Google employees.
The FAQ said it will also be putting a cap on number of rooms to be taken for meetings, noting conference rooms are “already difficult to book.” Employees will be discouraged from “camping” in a conference room, it added.
As for Covid-19, desks will be sanitized daily and employees will get a notification if someone in their area tests positive and reports it to Google.
Alibaba showcase its AI technology application achievements from Alibaba Cloud at the World Artificial Intelligence Conference in Shanghai, China on July 26, 2025.
Cfoto | Future Publishing | Getty Images
Alibaba delivered better than expected revenue in its fiscal second quarter as sales in its key cloud computing division accelerated.
Alibaba’s New York-listed shares were around 4.3% higher in premarket trade as investors looked past a plunge in profitability.
Here’s how the company did in its fiscal second quarter ended Sept. 30 versus LSEG estimates:
- Revenue rose 5% to 247.8 billion Chinese yuan ($34.8 billion) versus 242.65 billion yuan the previous year.
Investors are focused on Alibaba’s cloud computing division which books its revenue related to artificial intelligence. Over the past few quarters, Alibaba’s cloud revenue growth has accelerated.
Alibaba reported a 34% year-on-year rise in cloud computing revenue to 39.8 billion yuan versus expectations of 37.9 billion yuan. That growth rate was faster than the 26% notched in the June quarter.
The Chinese tech giant said its investments in AI were helping its cloud unit.
“Robust AI demand further accelerated our Cloud Intelligence Group business, with revenue up 34% and AI-related product revenue achieving triple-digit year-over-year growth for the ninth consecutive quarter,” CEO Eddie Wu said in an earnings statement on Tuesday.
In September, the company said it plans to increase spending on AI models and infrastructure development, on top of the 380 billion yuan ($53 billion) over three years it announced in February. Alibaba said on Tuesday it has spent around 120 billion yuan in capital expenditure toward AI and cloud infrastructure over the past four quarters.
Earnings before interest, taxes, and amortization (EBITA), a measure of profitability, increased by 35% to 3.6 billion yuan for its cloud division.
Alibaba has emerged as one of China’s leading AI players. On Monday, Alibaba said its Qwen app, the Chinese giant’s rival to OpenAI’s ChatGPT, surpassed 10 million downloads within the first week of its public launch. The app is powered by Alibaba’s Qwen artificial intelligence models.
Investors look past profit drop
Meanwhile, the company has been investing heavily in the cut-throat instant commerce market. This a product offering from Alibaba and some of its Chinese e-commerce rivals that promises super-fast delivery on certain items.
Investment in this new segment has weighed on the profitability of Alibaba’s overall business even as cloud computing remains strong.
Overall adjusted EBITA, a profitability measure closely-watched by analysts, fell 78% year-on-year to 9.1 billion yuan, with Alibaba attributing this partly to its investments in quick commerce.
But investors appear to be looking past this because of the growth acceleration at the cloud computing business and Alibaba’s core China e-commerce division which houses revenue from its online shopping platforms Taobao and Tmall as well as the quick commerce initiative. China e-commerce revenue rose 16% year-on-year to 132.6 billion yuan, with growth coming in faster than the previous quarter.
Revenue from quick commerce surged 60% year-on-year in the quarter versus 12% in the quarter before.
“In our consumption business, quick commerce continued to scale with significant improvement in unit economics and drove rapid growth in monthly active consumers on the Taobao app,” Wu said.
Jensen Huang, NVIDIA founder and CEO, has a Q&A session at a press conference during the APEC CEO summit on October 31, 2025 in Gyeongju, South Korea.
Woohae Cho | Getty Images News | Getty Images
Nvidia shares fell on Tuesday after The Information reported that Meta is considering using chips designed by Google.
Shares of Nvidia were 3.6% lower in premarket trade. Google-parent Alphabet was trading 3% higher after a more than 6% rally on Monday.
On Monday, The Information reported that Meta is considering using Google’s tensor processing units (TPUs) in its data centers in 2027. Meta may also rent TPUs from Google’s cloud unit next year, the publication reported.
Google launched its first-generation TPU in 2018 and it was initially designed for its own internal use for its cloud computing business. Since then, Google has launched more advanced versions of its chip that are designed to handle artificial intelligence workloads.
TPUs are a customized chip and experts say this gives Google an advantage over rivals as it can offer customers a highly efficient product for AI.
If Meta uses the TPUs, it would be big win for Google and potential validation of the technology.
Shares of Broadcom, which helps Google design its TPUs, were up more than 2% in premarket trade on Tuesday after an 11% rise the day before.
Nvidia remains the market leader with its graphics processing units (GPUs) that have become the main piece of hardware underpinning the huge AI infrastructure buildout. While Nvidia’s dominance is unlikely to be dislodged in the near term, Google’s TPUs add further competition into the AI semiconductor market.
Companies building AI infrastructure have been searching for a more diversified supply of chips to reduce reliance on Nvidia.
Meta is among the biggest spenders on AI infrastructure, with the company projecting its capital expenditure to stand between $70 billion to $72 billion this year.
The share price moves come amid continued debate around whether there is an “AI bubble” and stretched tech company valuations.
Nvidia has been central to the debate and the company last week reported a stronger-than-expected sales forecast for the current quarter but technology stocks fell after.
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