Earlier this week, Google CEO Sundar Pichai released a statement in a company-wide email, putting into perspective how the current domestic and global economic issues have affected the multi-billion dollar company. The main concern stated in the leaked email is a hiring freeze, an action that Google has not implemented since the 2008 financial crisis more than a decade ago. Additionally, this hiring freeze places more emphasis on current employees to work harder, with Pichai stating that all employees must have a more ‘entrepreneurial spirit’ and continue to work harder. Below is the leaked email, which was circulated among all employees of Google.
Hard to believe we’re already through the first half of 2022. It’s the right opportunity to thank everyone for the great work so far this year, and to share how my Leads and I are thinking about H2.
The uncertain global economic outlook has been top of mind. Like all companies, we’re not immune to economic headwinds. Something I cherish about our culture is that we’ve never viewed these types of challenges as obstacles. Instead, we’ve seen them as opportunities to deepen our focus and invest for the long term.
In these moments, I turn to our mission: to organize the world’s information and make it universally accessible and useful. It’s what inspired me to join the company 18 years ago, and what makes me so optimistic about the impact we are able to have on the world. Knowledge and computing are how we drive our mission forward. That’s the lens we use to decide where to invest — whether it’s in areas like Search, Cloud, Platforms and Hardware, the teams that support them, or in the AI that enables more helpful products and services.
We help people and society when we focus on what we do best, and do it really well. The investments we’ve made in the first half of the year reflect this vision. In Q2 alone, we added approximately 10,000 Googlers, and have a strong number of commitments for Q3 start dates which reflects, in part, the seasonal college recruiting calendar. These are extraordinary numbers, and they show our excitement about long-term opportunities, even in uncertain times.
Because of the hiring progress achieved so far this year, we’ll be slowing the pace of hiring for the rest of the year, while still supporting our most important opportunities. For the balance of 2022 and 2023, we’ll focus our hiring on engineering, technical and other critical roles, and make sure the great talent we do hire is aligned with our long-term priorities.
Moving forward, we need to be more entrepreneurial, working with greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days. In some cases, that means consolidating where investments overlap and streamlining processes. In other cases, that means pausing development and re-deploying resources to higher priority areas. Making the company more efficient is up to all of us — we’ll be creating more ways for you all to engage and share ideas to help, so stay tuned.
Broader Slowdown in Hiring
Google’s hiring freeze, while stunning, reflects the tech market as a whole as well, as its competitors, such as Microsoft, have also released statements saying they will curb or freeze hiring altogether for 2022 and 2023 with a global recession looming. Another large factor in this slowdown was the hiring frenzy that occurred during the pandemic, as tech companies faced large growth and compensated for the newfound virtual environment through a hiring spree, as highlighted in the email above where it states that 10,000 new employees were boarded by Google during Q2 this year.
Lower Stock Prices
Additionally, the ~20% dip in share valuations for Google has raised concerns for other aspects of the company, while most notably current employees will face increased scrutiny compared to previous quarters in an effort to raise the share valuations back to ‘sunnier days’. However, departments such as the investing and R&D department, which are pillars of Google’s innovation in its sectors, are also facing scrutiny as Pichai vows to “streamline investments and cut down on overlaps in spending”, leading to the high possibility of slowed quarterly budgets and an overall reduction in spending on inessential items. This move has widespread implications for not just the company but for the entire tech sector as well, as Google is known for buying key startups as well as investing in a multitude of companies. With such cuts on the horizon, we may see a shift in the broader economic environment as large tech companies assume more of the market share as startups fail to secure investment and partnerships with larger tech companies as has been the norm for the last decade in prominent areas such as Silicon Valley.
This latest development on the heels of growing inflation and a looming global recession has spurred even flagship companies that are generally considered ‘immune’ to a high degree to such fluctuations in the domestic and global economy to stagnate growth in an effort to reserve corporate revenue and sustain throughout this period as stocks are in the red across the board, not just in the tech sector but in almost all fields. With corporate rivals such as Microsoft experiencing a 24% dip in shares valuation and even Wall Street darling Tesla having a 9% fall in share price amid the news of slowed hiring and current economic conditions, it is almost certain that Google will follow in the footsteps of its rivals in terms of slowed hiring and tightened spending as companies seek to sustain throughout this recession and outlast their smaller startup competitors.