Google CEO defends desk-sharing policy, says some offices are like a ‘ghost town’
Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum (WEF) annual meeting in Davos, on January 22, 2020.
FABRICE COFFRINI | AFP | Getty Images
Google CEO Sundar Pichai defended the cloud unit’s new desk-sharing policy for employees, describing some of the company’s offices as practically empty and reminding staffers that real estate is pricey.
“To me it’s obvious that they are trying to be efficient and save money but at the same time also utilize resources,” Pichai said in a companywide meeting last week, according to audio obtained by CNBC. “There are people, by the way, who routinely complain that they come in and there are big swaths of empty desks and it feels like it’s a ghost town — it’s just not a nice experience.”
Pichai’s comments follow a CNBC report last month about Google’s plan to ask cloud employees and partners to share desks at the division’s five largest locations, which include New York and San Francisco. The company is calling the downsizing effort Cloud Office Evolution (CLOE).
On Alphabet’s fourth-quarter earnings call in early February, executives said they expect Google to incur costs of about $500 million in the current period related to reduced global office space, as the company reckons with slowing revenue growth and ongoing recession concerns.
Pichai indicated that there are many people coming to the office “only two days a week,” which he said makes for an inefficient use of current space.
“We should be good stewards of financial resources,” Pichai said. “We have expensive real estate. And if they’re only utilized 30% of the time, we have to be careful in how we think about it.”
At the same all-hands meeting, Anas Osman, Google Cloud’s strategy and operations vice president, said about one-third of employees were coming into the offices at least four days a week, citing data from a pilot the group conducted in regards to returning to physical locations.
As part of the pilot, Osman said, employees were given the option of having a dedicated or a shared desk.
“Those one-to-one desks actually were utilized roughly 35% of the time at four days or more,” Osman said. “We think this is a good balance of how to both find efficiencies and create a better experience.”
In some ways, sharing also led to more productivity, he said.
“The data from the pilot shows that Googlers reported significantly better collaboration when they had assigned days in the office even if that was in a rotational model and a shared desk,” Osman said.
Pichai said the new policy is just for cloud employees at the moment, and added that the company is “giving teams freedom to experiment.” The cloud division makes up roughly a quarter of the company’s overall workforce.
During the meeting, Pichai addressed employee concerns regarding the rollout of the desk-sharing policy and how it was communicated to the workforce. CNBC previously reported that memes started showing up in the internal Memegen system criticizing the messaging from leadership. One popular meme said, “Not every cost-cutting measure needs to be word mangled into sounding good for employees.”
In responding to questions and comments submitted by employees, Pichai read one that said, “double speak is disrespectful and frustrating,” and “bad things happen, no need to make every bad thing sound like a miracle.”
Pichai said in response, “I agree with the sentiment here. The feedback is valid.”
“We should always strive to be as straightforward as possible,” Pichai said. “I think it’s important to understand at our scale, pretty much all communication are public in nature. You’re speaking to the world and there are many, many stakeholders and so at times, nuance is important and words can have a material impact and I think sometimes you see that reflected in some of the communications.”
A Google spokesperson didn’t immediately respond to a request for comment.
An Electron rocket launches the Baby Come Back mission from New Zealand on July 17, 2023.
Rocket Lab
Rocket Lab stock soared 8% Monday, building on a strong run fueled by space innovation.
Shares of the space infrastructure company have nearly doubled over the last two months following a slew of successful launches and a deal with the European Union.
The stock is up 63% year to date after surging nearly sixfold in 2024.
Last month, Rocket Lab announced a partnership with the European Space Agency to launch satellites for constellation navigation before December.
Rocket Lab also announced the successful launch of its 66th, 67th and 68th Electron rockets in June. The company successfully deployed two rockets from the same site in 48 hours.
Rocket Lab competes with a growing list of companies in a maturing and increasingly competitive space industry with growing demand. Some of the main competitors in the sector include Elon Musk‘s SpaceX and Firefly Aerospace, which filed its prospectus to go public on Friday.
“For Electron, our little rocket, we’ve seen increased demand over the last couple of years and we’re not just launching single spacecraft — these are generally entire constellations for customers,” CEO Peter Beck told CNBC last month.
He said the company is producing a rocket every 15 days.
Beck, a New Zealand-native, founded the company in 2006. Since its debut on the Nasdaq in August 2021 through a merger with a special purpose acquisition company, the Long Beach, California-based company’s market value has swelled to more than $19 billion.
WATCH: Rocket Lab CEO Peter Beck: One thing I don’t worry about at night is demand
Technology
Anthropic, Google, OpenAI and xAI granted up to $200 million for AI work from Defense Department
A view of the Pentagon on December 13, 2024, in Washington, DC. Home to the US Defense Department, the Pentagon is one of the world’s largest office buildings.
Daniel Slim | Afp | Getty Images
The U.S. Department of Defense on Monday said it’s granting contract awards of up to $200 million for artificial intelligence development at Anthropic, Google, OpenAI and xAI.
The DoD’s Chief Digital and Artificial Intelligence Office said the awards will help the agency accelerate its adoption of “advanced AI capabilities to address critical national security challenges.” The companies will work to develop AI agents across several mission areas at the agency.
“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” Doug Matty, the DoD’s chief digital and AI officer, said in a release.
Elon Musk’s xAI also announced Grok for Government on Monday, which is a suite of products that make the company’s models available to U.S. government customers. The products are available through the General Services Administration (GSA) schedule, which allows federal government departments, agencies, or offices to purchase them, according to a post on X.
OpenAI was previously awarded a year-long $200 million contract from the DoD in 2024, shortly after it said it would collaborate with defense technology startup Anduril to deploy advanced AI systems for “national security missions.”
In June, the company launched OpenAI for Government for U.S. federal, state, and local government workers.
WATCH: US needs an allied strategy for AI investment in military and defense: Palantir
Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
David Paul Morris | Bloomberg | Getty Images
Meta CEO Mark Zuckerberg on Monday said he plans to invest “hundreds of billions of dollars” into artificial intelligence compute infrastructure, and that Meta plans to bring its first supercluster online next year.
A supercluster is a large, complex computing network that’s designed to train advanced AI models and handle their workloads.
“Meta Superintelligence Labs will have industry-leading levels of compute and by far the greatest compute per researcher,” Zuckerberg wrote in a Facebook post on Monday. “I’m looking forward to working with the top researchers to advance the frontier!”
Zuckerberg said Meta’s first supercluster is called Prometheus, and that the company is building several other multi-gigawatt clusters. One cluster, called Hyperion, will be able to scale up to five gigawatts over several years, he said.
Zuckerberg has been on a multibillion-dollar AI hiring spree in recent weeks, highlighted by a $14 billion investment in Scale AI. He announced a new organization in June called Meta Superintelligence Labs that’s made up of top AI researchers and engineers.
Zuckerberg had grown frustrated with Meta’s progress in AI, especially after the release of its Llama 4 AI models in April received a lukewarm response from developers. He is revamping Meta’s approach to better compete with rivals like OpenAI and Google.
“For our superintelligence effort, I’m focused on building the most elite and talent-dense team in the industry,” Zuckerberg wrote Monday.
WATCH: Meta announces several multi-gigawatt data centers, first planning to come online in 2026
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