Google employees question execs over ‘decline in morale’ after blowout earnings
Google’s business is growing at its fastest rate in two years, and a blowout earnings report in April sparked the biggest rally in Alphabet shares since 2015, pushing the company’s market cap past $2 trillion.
But at an all-hands meeting last week with CEO Sundar Pichai and CFO Ruth Porat, employees were more focused on why that performance isn’t translating into higher pay, and how long the company’s cost-cutting measures are going to be in place.
“We’ve noticed a significant decline in morale, increased distrust and a disconnect between leadership and the workforce,” a comment posted on an internal forum ahead of the meeting read. “How does leadership plan to address these concerns and regain the trust, morale and cohesion that have been foundational to our company’s success?”
Google is using artificial intelligence to summarize employee comments and questions for the forum.
Alphabet’s top leadership has been on the defensive for the past few years, as vocal staffers have railed about post-pandemic return-to-office mandates, the company’s cloud contracts with the military, fewer perks and an extended stretch of layoffs — totaling more than 12,000 last year — along with other cost cuts that began when the economy turned in 2022.
Employees have also complained about a lack of trust and demands that they work on tighter deadlines with fewer resources and diminished opportunities for internal advancement.
The internal strife continues despite Alphabet’s better-than-expected first-quarter earnings report, in which the company also announced its first dividend as well as a $70 billion buyback.
“Despite the company’s stellar performance and record earnings, many Googlers have not received meaningful compensation increases” a top-rated employee question read. “When will employee compensation fairly reflect the company’s success and is there a conscious decision to keep wages lower due to a cooling employment market?”
Another highly-rated comment centered around the company’s priorities, including its hefty investments in artificial intelligence.
“To many people, there’s a clear disconnect between spending billions on stock buybacks and dividends and re-investing in AI and retraining critical Googlers,” the post said.
Ruth Porat, Alphabet’s chief financial officer, appears on a panel session at the World Economic Forum in Davos, Switzerland, on May 24, 2022.
Hollie Adams | Bloomberg | Getty Images
“Our priority is to invest in growth,” Porat said, as she took the microphone to respond to questions. “Revenue should be growing faster than expenses.”
She also took the rare step of admitting to leadership’s mistakes in its prior handling of investments.
“The problem is a couple of years ago — two years ago, to be precise — we actually got that upside down and expenses started growing faster than revenues,” said Porat, who announced nearly a year ago that she would be stepping down from the CFO position but hasn’t yet vacated the office. “The problem with that is it’s not sustainable.”
Google executives have been hammering this theme of late.
Search boss Prabhakar Raghavan, in an internal meeting last month, pointed to Google’s core business challenges, saying “things are not like they were 15 to 20 years ago,” and urged employees to work faster. He told his team, “It’s not like life is going to be hunky-dory, forever.”
Google’s cloud business was among units instructing employees to move within shorter timelines even though they had fewer resources after cost cuts.
Google’s use of cash
There were a lot of employee questions ahead of last week’s meeting directed at the company’s buyback, Porat said.
As of last quarter, Alphabet had more than $100 billion in cash on the balance sheet but, Porat said, “you can’t just drain it” or the company would find itself in the same position as in 2022.
By contrast, distributing cash to shareholders is not considered an expense on the balance sheet, she said, adding that the board has a fiduciary duty to consider such measures. Buybacks and dividends don’t replace investments in AI, Porat said.
Pichai chimed in when Porat wrapped up her response.
“I think you almost set the record for the longest TGIF answer,” he said. Google all-hands meetings were originally called TGIFs because they took place on Fridays, but now they can occur on other days of the week.
Pichai then joked that leadership should hold a “Finance 101” Ted Talk for employees.
With respect to the decline in morale brought up by employees, Pichai said “leadership has a lot of responsibility here, adding that “it’s an iterative process.”
Pichai said the company staffed up too much during the Covid pandemic.
“We hired a lot of employees and from there, we have had course correction,” Pichai said.
Alphabet’s full-time headcount climbed to over 190,000 at the end of 2022, up almost 22% from a year earlier and 40% higher than at the close of 2020.
Pichai, who replaced Google co-founder Larry Page as CEO of Alphabet in 2019, has taken his share of criticism of late for his messaging to the workforce as well as his lofty pay package, which swelled to $226 million, including stock awards, in 2022.
The package in 2022 included $218 million in equities through a triennial stock grant. His total pay in 2023 was $8.8 million, up from about $8 million the prior year (excluding the stock grant), according to Alphabet’s proxy filing. Other than Pichai’s $2 million salary for each year, most of his additional compensation was for personal security.
Employees have complained about the level of Pichai’s compensation at a time when the company is downsizing.
“Given the recent headcount and positive earnings, what is the company’s headcount strategy?” one question read. Another asked, “Given the strong results, are we done with cost-cutting?”
Pichai said the company is “working through a long period of transition as a company” which includes cutting expenses and “driving efficiencies.” Regarding the latter point, he said, “We want to do this forever.”
“To be clear, we’re growing our expenses as a company this year, but we’re moderating our pace of growth” Pichai said. “We see opportunities where we can re-allocate people and get things done.”
A Google spokesperson reiterated to CNBC that the company is investing in its biggest priorities and will continue to hire in those areas.
The spokesperson also said most employees will receive a pay raise this year, including an increased salary, equity grants and a bonus. Executives at the all-hands meeting said that staffers who received raises last year got smaller raises than usual.
Another comment floated ahead of the meeting was tied to “growing concerns about jobs moving from the U.S. to lower-cost locations.” CNBC reported last week that Google is laying off at least 200 employees from its “Core” organization, which includes key teams and engineering talent.
Executives were asked about the ongoing layoffs, despite the strong earnings report, and “when can we expect an end to the uncertainty and disruption that layoffs create?”
Pichai said the company will have worked through the majority of layoffs in the first half of 2024.
“Assuming current conditions, the second half of the year will be much smaller in scale,” Pichai said, referring to job cuts. He said it will continue to be “very, very disciplined about managing headcount growth throughout the year.”
That means the company is still making tough choices regarding investments in new projects.
“There’s a lot of demand to do new things and, in the past, we would have just done it reflexively by growing headcount,” Pichai said. “We can’t do it now through the transition we are in.”
WATCH: Alphabet’s investor call had a ‘remarkable’ level of transparency, says Jim Cramer
The logo for the Food and Drug Administration is seen ahead of a news conference on removing synthetic dyes from America’s food supply, at the Health and Human Services Headquarters in Washington, DC on April 22, 2025.
Nathan Posner | Anadolu | Getty Images
The U.S. Food and Drug Administration on Tuesday published a warning letter addressed to the wrist wearable company Whoop, alleging it is marketing a new blood pressure feature without proper approvals.
The letter centers around Whoop’s Blood Pressure Insights (BPI) feature, which the company introduced alongside its latest hardware launch in May.
Whoop said its BPI feature uses blood pressure information to offer performance and wellness insights that inform consumers and improve athletic performance.
But the FDA said Tuesday that Whoop’s BPI feature is intended to diagnose, cure, treat or prevent disease — a key distinction that would reclassify the wellness tracker as a “medical device” that has to undergo a rigorous testing and approval processes.
“Providing blood pressure estimation is not a low-risk function,” the FDA said in the letter. “An erroneously low or high blood pressure reading can have significant consequences for the user.”
A Whoop spokesperson said the company’s system offers only a single daily estimated range and midpoint, which distinguishes it from medical blood pressure devices used for diagnosis or management of high blood pressure.
Whoop users who purchase the $359 “Whoop Life” subscription tier can use the BPI feature to get daily insights about their blood pressure, including estimated systolic and diastolic ranges, according to the company.
Whoop also requires users to log three traditional cuff-readings to act as a baseline in order to unlock the BPI feature.
Additionally, the spokesperson said the BPI data is not unlike other wellness metrics that the company deals with. Just as heart rate variability and respiratory rate can have medical uses, the spokesperson said, they are permitted in a wellness context too.
“We believe the agency is overstepping its authority in this case by attempting to regulate a non-medical wellness feature as a medical device,” the Whoop spokesperson said.
High blood pressure, also called hypertension, is the number one risk factor for heart attacks, strokes and other types of cardiovascular disease, according to Dr. Ian Kronish, an internist and co-director of Columbia University’s Hypertension Center.
Kronish told CNBC that wearables like Whoop are a big emerging topic of conversation among hypertension experts, in part because there’s “concern that these devices are not yet proven to be accurate.”
If patients don’t get accurate blood pressure readings, they can’t make informed decisions about the care they need.
At the same time, Kronish said wearables like Whoop present a “big opportunity” for patients to take more control over their health, and that many professionals are excited to work with these tools.
Understandably, it can be confusing for consumers to navigate. Kronish encouraged patients to talk with their doctor about how they should use wearables like Whoop.
“It’s really great to hear that the FDA is getting more involved around informing consumers,” Kronish said.
FILE PHOTO: The headquarters of the U.S. Food and Drug Administration (FDA) is seen in Silver Spring, Maryland November 4, 2009.
Jason Reed | Reuters
Whoop is not the only wearable manufacturer that’s exploring blood pressure monitoring.
Omron and Garmin both offer medical blood pressure monitoring with on-demand readings that fall under FDA regulation. Samsung also offers blood-pressure-reading technology, but it is not available in the U.S. market.
Apple has also been teasing a blood pressure sensor for its watches, but has not been able to deliver. In 2024, the tech giant received FDA approval for its sleep apnea detection feature.
Whoop has previously received FDA clearance for its ECG feature, which is used to record and analyze a heart’s electrical activity to detect potential irregularities in rhythm. But when it comes to blood pressure, Whoop believes the FDA’s perspective is antiquated.
“We do not believe blood pressure should be considered any more or less sensitive than other physiological metrics like heart rate and respiratory rate,” a spokesperson said. “It appears that the FDA’s concerns may stem from outdated assumptions about blood pressure being strictly a clinical domain and inherently associated with a medical diagnosis.”
The FDA said Whoop could be subject to regulatory actions like seizure, injunction, and civil money penalties if it fails to address the violations that the agency identified in its letter.
Whoop has 15 business days to respond with steps the company has taken to address the violations, as well as how it will prevent similar issues from happening again.
“Even accounting for BPI’s disclaimers, they do not change this conclusion, because they are insufficient to outweigh the fact that the product is, by design, intended to provide a blood pressure estimation that is inherently associated with the diagnosis of a disease or condition,” the FDA said.
WATCH: Watch CNBC’s full interview with FDA commissioner Dr. Marty Makary
United Launch Alliance Atlas V rocket carrying the first two demonstration satellites for Amazon’s Project Kuiper broadband internet constellation stands ready for launch on pad 41 at Cape Canaveral Space Force Station on October 5, 2023 in Cape Canaveral, Florida, United States.
Paul Hennessey | Anadolu Agency | Getty Images
As Amazon chases SpaceX in the internet satellite market, the e-commerce and computing giant is now counting on Elon Musk’s rival company to get its next batch of devices into space.
On Wednesday, weather permitting, 24 Kuiper satellites will hitch a ride on one of SpaceX’s Falcon 9 rockets from a launchpad on Florida’s Space Coast. A 27-minute launch window for the mission, dubbed “KF-01,” opens at 2:18 a.m. ET.
The launch will be livestreamed on X, the social media platform also owned by Musk.
The mission marks an unusual alliance. SpaceX’s Starlink is currently the dominant provider of low earth orbit satellite internet, with a constellation of roughly 8,000 satellites and about 5 million customers worldwide.
Amazon launched Project Kuiper in 2019 with an aim to provide broadband internet from a constellation of more than 3,000 satellites. The company is working under a tight deadline imposed by the Federal Communications Commission that requires it to have about 1,600 satellites in orbit by the end of July 2026.
Amazon’s first two Kuiper launches came in April and June, sending 27 satellites each time aboard rockets supplied by United Launch Alliance.
Assuming Wednesday’s launch is a success, Amazon will have a total of 78 satellites in orbit. In order to meet the FCC’s tight deadline, Amazon needs to rapidly manufacture and deploy satellites, securing a hefty amount of capacity from rocket providers. Kuiper has booked up to 83 launches, including three rides with SpaceX.
Space has emerged as a battleground between Musk and Amazon founder Jeff Bezos, two of the world’s richest men. Aside from Kuiper, Bezos also competes with Musk via his rocket company Blue Origin.
Blue Origin in January sent up its massive New Glenn rocket for the first time, which is intended to rival SpaceX’s reusable Falcon 9 rockets. While Blue Origin currently trails SpaceX, Bezos last year predicted his latest venture will one day be bigger than Amazon, which he started in 1994.
Kuiper has become one of Amazon’s biggest bets, with more than $10 billion earmarked for the project. The company may need to spend as much as $23 billion to build its full constellation, analysts at Bank of America wrote in a note to clients last week. That figure doesn’t include the cost of building terminals, which consumers will use to connect to the service.
The analysts estimate Amazon is spending $150 million per launch this year, while satellite production costs are projected to total $1.1 billion by the fourth quarter.
Amazon is going after a market that’s expected to grow to at least $40 billion by 2030, the analysts wrote, citing estimates by Boston Consulting Group. The firm estimated that Amazon could generate $7.1 billion in sales from Kuiper by 2032 if it claims 30% of the market.
“With Starlink’s solid early growth, our estimates could be conservative,” the analysts wrote.
WATCH: Amazon launches first Kuiper internet satellites into space
Bitcoin fell below the $117,000 level on Tuesday after cryptocurrency-related bills were blocked in the House of Representatives.
The price of bitcoin was last down 2.8% at $116,516.00, according to Coin Metrics. That marks a pullback from the day’s high of $120,481.86.
Bitcoin/USD Coin Metrics, 1-day
The drop comes on the heels of multiple crypto-related bills failing to overcome a procedural hurdle in the House, with 13 Republicans voting with Democrats to block the motion in a 196-223 vote.
In recent days, bitcoin has been trading at all-time highs, spurred by institutional buying of bitcoin exchange-traded funds (ETFs) amid rising optimism that Congress would soon pass crypto legislation.
Stocks linked to crypto also came under pressure in late afternoon trading. Shares of bitcoin miners Riot Platforms and Mara Holdings closed down 3.3% and 2.3%, respectively. Others like crypto trading platforms Coinbase slid 1.5%. All were under pressure in extended trading.
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