Nothing good – the recent layoffs hit its best and brightest leaders hard
Remember when Google's motto was "Don't be Evil"? I do. Even though Google dumped that phrase from its code of conduct in 2018, many of us still thought Google was a bit better than other companies.
We were wrong. Those who were fired last week found out from emails, discovering they no longer had corporate access and their ID badges no longer worked. Class act, Google.
How were they chosen? Good question. It has been widely reported that some of the firing was done by an algorithm. Those fired included staffers who had just received high performance reviews or held top managerial positions with annual compensation packages of $500,000 to $1 million. But, as I looked at who was being fired, something struck me. Many of those shown the doors were the best of the best in Google's open source program office (OSPO) and other open source efforts.
For example, Chris DiBona, who founded Google's OSPO 18 years ago, was let go. As was Jeremy Allison, co-creator of Samba and Google engineer; Cat Allman, former Program Manager for Developer EcoSystems; and Dave Lester, a new hire who was taking ownership of Google's open source security initiatives.
These are not the people anyone in their right mind, or HR container, would want to fire. They are open source movers and shakers. In open source leadership circles, they're people everyone knows and are happy to work with.
What the hell, Google?
Maybe Sundar Pichai, Larry Page, or Sergey Brin know what's going on. No one in Google's rank and file does. As one Google executive told me: "We won't know the full impact for a little bit – everyone is still listed as an employee and is still in the org chart. I don't think the managers know anything beyond their immediate direct reports. It's been a mess with little to no communication."
It certainly can't be because Google doesn't need open source expertise. Google lives and dies on open source software. It also can't be because Google is switching its focus to AI in the wake of ChatGPT. True, Google AI Lab, after a rough few months, was left untouched.
But let me throw some prominent AI/ML toolkit and framework names by you: PyTorch, TensorFlow, and Rasa. What do they all have in common? Why, they're all open source! Imagine that! This was no time for Google to let its best and brightest open source personnel go.
So why did Google do this? Not to mention firing thousands of other good people? It's not because Google's bottom line is hurting. Its parent company, Alphabet, reported third quarter revenues of $69.1 billion, up 6 percent versus last year or up 11 percent on a constant currency basis. Profit was down 16 percent but still came in at $46.34 billion.
Just making billions isn't enough for some people. The New York Times heralded the news with "Alphabet's Profit Drops 27 Percent From a Year Earlier." That November news was "bad" enough for activist hedge fund investor TCI Fund Management to cry: "The company has too many employees, and the cost per employee is too high."
True, Google pays top dollar. "The average compensation at Google was $295,884 in 2021." That is real money. But the cost of living in Mountain View, California, home of Google's HQ, on a scale where 100 is the US average is 278.8. To put that in more concrete terms, the median cost for a house is $1,880,600.
TCI admitted that: "Alphabet employs some of the most talented and brightest computer scientists and engineers, but these represent only a fraction of the employee base." True, but it's not the administrative and marketing staff making that kind of money. And, by the way, Google just got rid of some of its "most talented and brightest."
Of course, hedge funds are run by beancounters interested only in short-term profit. They couldn't care less about whether Google, or any other company, actually delivers good products and services.
It's all about the money. TCI leader Sir Christopher Hohn, who is reported to have paid himself £1.5 million ($1.8 million) a day in 2022, knows all about that. That's six Google employees' yearly salaries a day for those counting at home.
Given that, it should be no surprise that Hohn called Google's chopping thousands a "step in the right direction." But it's not enough. Hohn thinks Google's "management should aim to reduce headcount to around 150,000… This would require a total headcount reduction in the order of 20 percent."
But wait, there's more! Hohn also wants Google to cut "excessive employee compensation." That's rich from someone paying himself over $75,000 an hour whether he's awake, drinking, or sleeping.
Google would be wisest to stop listening to pushy investors and pay more attention to preserving their real wealth: the company's brilliant developers and leaders.
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