As Google tries to navigate an environment of slowing growth, cost cutting and employee dissent over cultural changes, the CEO is finding himself on the defensive.
At a companywide all-hands meeting this week, Pichai was faced with tough questions from employees related to cuts to travel and entertainment budgets, managing productivity and potential layoffs.
In a question that was highly rated by staffers, Pichai was asked why the company is "nickel-and-diming employees" at a time when it has record profits.
I don't know how to say it. Pichai started his response slowly. I hope you're reading the news outside. I think it's important that we pull together to get through moments like this because we are being a bit more responsible through one of the toughest macroeconomic conditions in the past decade.
Tech companies are facing a number of economic challenges, including a potential recession and rising interest rates. Companies that have been known for high growth and lots of fun perks are seeing what it's like on the other side.
In July, Alphabet reported its second consecutive quarter of weaker-than- expected earnings and revenue, and third-quarter sales growth is expected to dip into the single digits. It's not just the economy that's causing challenges at Google, according to Pichai.
"We don't get to choose the macroeconomic conditions always," he said in the meeting.
Ruth Porat, the company's CFO, said earlier this year that she expects some economic issues to persist in the near term. The next generation of thePixelbook laptop has been canceled and funding to the Area 120 in-house incubator has been slashed.
In order to get to better results faster andeliminate waste, the company launched an effort called "Simplicity sprint" in July. Pichai said earlier this month that he wanted to make the company 20% more productive.
One of the top-rated questions posed by employees at this week's meeting asked Pichai to elaborate on his commentary regarding improved productivity.
Pichai said that they are going to be constrained in their growth in a looking-ahead basis. Maybe you were going to hire six more people, but how are you going to make that happen? Different teams will make the answers different.
Over 7,000 responses have been received from employees regarding suggestions from the effort.
Over the course of many years, the product launch process has become more complicated than it needs to be. Is it possible to take two steps out of the process and make it 20% more efficient? All of us chipping in can help the company. There is no way that can be solved unless teams of all sizes do better.
There was a recent employee survey in which employees criticized the company.
Workers' ability to focus on work was affected by the news of the cuts at Area 120, and another employee asked how the company would share its plans for potential job cuts.
He said that telling the entire workforce of cuts is not a scaleable way to do it, but he would try and notify the company of the more important updates.
In New York, Pichai took questions in front of a live audience.
The employee wrote that it was an interesting choice for Sundar to be in New York for TGIF the week after travel for employees is cut to only the most important. I'm sure Sundar has important business meetings in New York.
Pichai thought so. I believe it did. There were people in the audience who were laughing.
Pichai was evasive when asked about executive compensation. Other top executives made over 28 million dollars last year, while Pichai made over 6 million.
He said that the culture of the company can still be enjoyable even if some things are taken away.
He remembered when the search engine was small. We shouldn't equate fun with money sometimes. People may be having fun in a startup, but it shouldn't be seen as a sign of wealth.
Management wants employees to follow the return-to-office policy while also saying no need to travel or connect in person.
It's not ideal that people want to see each other at a time like this. I believe you can get together in person if you haven't seen your team in a while. I think that's why we're not saying no to travel.
Sales teams will have more latitude to travel since they have to meet with customers, according to the head of the finance department at the company.
"We know there's a lot of value in being next to your team but we're just asking you to be careful and limit your travel and expenses where you can." She wanted employees to temper their expectations.
She said, "Wherever you have summits and big meetings, please do them in the office." People should have fun. We want people to go to holiday parties and year-end celebrations. We want them to be small, informal and not to go over the top.
Pichai addressed a question about why the company has shifted from rapid hiring and spending to equally aggressive cost saving.
Pichai didn't agree with the description.
He is concerned that you think what we have done is aggressive cost saving. We should not get disconnected. It's important to take a long-term view of the situation.
He said that the company is still investing in long-term projects like quantum computing and that at times of uncertainty, it's important to be smart.
There was a question about raises, equity and bonuses and how they would be affected by the changes. He said the company wouldn't deviate from paying workers at the top end of the market in order to be competitive.
Pichai said the same thing.
He said that they were committed to taking care of their workers. We are just working through a tough moment macroeconomically and it is important that we work together.
Sundar has been talking to the company about ways they can be more focused. In a moment of uncertainty, the company's leaders are working to be responsible and efficient in all that their teams do, and that they'reuring that our people are working on the highest impact work.
It's time to trim. They are reducing costs.
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