Google just announced a big trim of its management layer, cutting more than 35% of managers who supervise tiny teams. CEO Sundar Pichai first revealed this major move to focus on operational efficiency. It intensively seeks to make their internal operations more efficient and reduce bureaucracy inside of this small organization. The new rules follow months of discussions over employee morale and company culture after layoffs and a recent voluntary buyout offered to employees in March.
The cut only affects those managers of fewer than three direct reports. This change is intended to reduce bureaucratic levels, enabling a more dynamic organizational structure. PHOTO BY JOSH EDELSON/AFP via Getty Images Pichai signaled these moves at the Google I/O developers conference in Mountain View, California on May 10, 2023.
In order to take into account employee feedback, rather than executing a layoff across the board, Google decided to pursue voluntary buyouts. Employees indicated the voluntary buyouts would be a better option, saying it would be less disruptive. The buyouts largely hit U.S.-based teams including search, marketing, hardware and human resources. According to Fiona Cicconi, Google’s chief people officer, between 3% and 5% of employees in the targeted teams accepted the buyout offers.
“It’s actually quite interesting to see who’s taking a VEP, and it’s people sort of wanting a career break, sometimes to take care of family members,” – Fiona Cicconi.
In his conference, Pichai touched on the importance of hearing and responding to employee fears related to laying off workers and fears of internal obstructionism. He noted that the aim wasn’t simply to create a more productive workforce but to change the company’s cultural fabric as a whole.
In a recent quarterly earnings call, Google’s finance chief, Anat Ashkenazi, suggested that the company was ready to take cost-cutting “a step further” come October. Ashkenazi, who joined Alphabet last year, has played a key role in steering Google’s fiscal tactics during deepening market adversity.
“When we look across our entire leadership population, that’s managers, directors and VPs, we want them to be a smaller percentage of our overall workforce over time,” – Sundar Pichai.
The recent reorganization has drastically reduced the management staff. Brian Welle, a former Google representative now with the Shorenstein Center, declared that Google has 35% fewer managers and direct reports. This reorganization is designed to make our decision-making processes more efficient and facilitate faster, more straightforward communication between teams.
Welle emphasized that the changes were working already. He observed that there’s some very rapid change occurring. All of which may indicate that the company is making quick progress in the direction of its efficiency targets.
As Google has been trying to adapt to these shifts, employees recently expressed fears about job losses and alienation within the company. In meetings, Pichai confronted big picture concerns directly. He even jokingly proposed that they should implement a few Meta policies to help them run more like a profit maximizing organization.
“Should we incorporate all policies of Meta while we’re at it? Or should we only pick and choose the few policies we like?” – Sundar Pichai.
Google senior director of benefits Alexandra Maddison answered our questions about making employee benefits work during the transition. She attempted to reassure staff that their current offerings are still cutting edge.
“We’re very confident that our current offering is competitive,” – Alexandra Maddison.
On the topic of employee well-being, Maddison added, “We have a lot of leaves, not least our vacation, which is there for exactly that — resting and recharging.”