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.
Cheng Xin | Getty Images
Shares of Workday popped 9% on Wednesday to around $238 after activist investor Elliott Investment Management announced a $2 billion stake in the company.
Workday announced a multi-year plan to enhance its operating model and capital allocation framework on Tuesday, and Elliott said it believes the plan will drive “substantial long-term value creation.”
“We believe CEO Carl Eschenbach, CFO Zane Rowe and the entire Workday team have made substantial progress in recent years, positioning Workday as a unique software franchise with industry-leading growth potential, best-in-class customer retention and a proven management team,” Elliott said in a release on Tuesday.
“We appreciate Elliott’s support,” a Workday spokesperson told CNBC in a statement. “Workday is a market leader with strong growth potential, and we remain focused on executing our strategy and delivering innovative solutions that help our customers succeed.”
Workday provides software for finance and human resources departments.
Last month, Workday said it would acquire Paradox, a company that offers conversational artificial intelligence software for recruiting. Workday did not disclose the terms of the deal.
Workday shares are down roughly 15% year to date. The company’s market cap sits at about $63 billion.
Waymo has partnered with Uber to get its robotaxis into Atlanta and Austin, Texas. Now it’s teaming up with Lyft for the first time in a commercial deal to enter Nashville next year.
Lyft stock climbed 10% on the news.
Riders in Nashville will be able to hail a Waymo robotaxi through the Waymo One app, and Lyft will add Waymo robotaxis to its platform over time, the companies said in a joint statement on Wednesday.
Lyft “will provide end-to-end fleet management services including vehicle readiness and maintenance, infrastructure, and depot operations in Nashville,” for the Waymo fleet, the companies said.
Waymo, which is owned by Alphabet, has taken a big lead in the U.S. robotaxi market, launching in Phoenix, San Francisco and Los Angeles, as well as Austin and Atlanta. It surpassed 10 million paid trips in May, and has plans to start commercial operations next year in Miami, Washington, D.C., Dallas, Denver, and now Nashville.
Lyft CEO David Risher told CNBC’s “Squawk on the Street” Wednesday that it’s a “formative” time for the industry.
“What we see in markets where there are autonomous cars … we actually see those markets growing faster, faster than a lot of the other markets we operate in,” he said.
Tesla and Amazon’s Zoox have limited tests underway. Smaller players like Wayve, Nuro and May Mobility are also working on driverless technology in the U.S.
In international markets, Waymo faces its most formidable rival in Baidu’s Apollo Go service. In August, Baidu announced a partnership with Lyft to bring driverless taxis to Europe next year. A month earlier, Baidu said it was working with Uber to deploy autonomous cars in markets outside the U.S. and mainland China, starting with Asia and the Middle East later this year.
Lyft previously worked with Waymo on a pilot in the Phoenix area in 2019. The ride-hailing company started a test program with May Mobility in Atlanta earlier this month.
Lyft can use the help as it tries to keep up with Uber, which has expanded its lead over its smaller rival. Uber’s market cap has surpassed $200 billion, making it about 25 times more valuable than Lyft.
Lyft and uber stock chart year-to-date.
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