Alphabet’s Layoffs Aren’t Very Googley

In 2004, Google cofounders Larry Page and Sergey Brin made a bold statement when they took their company public: they would not be beholden to Wall Street’s expectations. To ensure they could do this, the founders structured the company so that they controlled the majority of voting shares. They also promised to pamper their employees with generous compensation and perks like in-house massages, free food, and lavish payouts.

At the end of 2010, Page and Brin blew their workers’ minds by announcing an across-the-board 10 percent raise, a doubling of the generous annual bonus, and a $1,000 Christmas present, just for the hell of it. For years, Google was renowned for coddling its workers, but that all changed this month when Google’s parent company Alphabet laid off 12,000 employees, about 6 percent of its workforce, including many senior leaders and some people who had worked there since its early days.

Current CEO Sundar Pichai’s memo was similar to other corporate dispatches, but the bloodletting at Alphabet was different. Aside from letting go a few hundred sales employees in 2009, the company had never experienced a major layoff. And along with it are signals that the age of limitless perks is gone.

Pichai does have a case to make for the layoffs and a cutback in perks. With 187,000 employees, there were undeniably thousands whose jobs were not integral to the company. The cuts also allowed Alphabet to spend more resources on AI, an area that was spared from the layoffs.

In some ways the layoffs represent what seems like a gradual shift in philosophy. For years, Alphabet has funded projects devoted to producing novel forms of technology, but now the company seems more focused on its more concrete businesses. Wall Street has griped for years about the unprofitability of the company’s aspirational “other bets,” and now Alphabet appears to be listening.

Google’s founders made a promise to not sing to Wall Street’s tune and while they may no longer be deeply involved, their legacy remains. The recent layoffs and cutbacks in perks may be a sign that the company is changing its focus, but it’s clear that the founders’ commitment to their employees will remain at the heart of the company.

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