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.
The Nasdaq MarketSite in New York, June 9, 2023.
Michael Nagle | Bloomberg | Getty Images
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
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