Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum annual meeting in Davos.
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Google is asking cloud employees and partners to share their desks and alternate days with their desk mates starting next quarter, citing “real estate efficiency,” CNBC has learned.
The new desk-sharing model will apply to Google Cloud’s five largest U.S. locations — Kirkland, Washington; New York City; San Francisco; Seattle; and Sunnyvale, California — and is happening so the company “can continue to invest in Cloud’s growth,” according to an internal FAQ recently shared with cloud employees and viewed by CNBC. Some buildings will be vacated as a result, the document noted.
“Most Googlers will now share a desk with one other Googler,” the internal document stated, noting they expect employees to come in on alternate days so they’re not at the same desk on the same day. “Through the matching process, they will agree on a basic desk setup and establish norms with their desk partner and teams to ensure a positive experience in the new shared environment.”
The FAQ says employees may come in on other days, but if they’re in on an unassigned day, they will use “overflow drop-in space.”
Internally, leadership has given the new seating arrangement a title: “Cloud Office Evolution” or “CLOE,” which it describes as “combining the best of pre-pandemic collaboration with the flexibility” of hybrid work. The new workspace plan is not a temporary pilot, the document noted. “This will ultimately lead to more efficient use of our space,” it said.
Google also used its internal data it has on it its employee office return patterns to inform the decision, the FAQ stated. In addition to slower office return patterns, the company has slowed hiring and laid off 11,000 employees in January.
Memes started showing up in the company platform Memegen, poking fun at the change — specifically targeting the “corpspeak” used by leadership to tout the new desk arrangement in what they viewed to be a cost-cutting measure.
“Not every cost-cutting measure needs to be word mangled into sounding good for employees,” one popular meme read. “A simple ‘We are cutting office space to reduce costs’ would make leadership sound more believable.”
A Google spokesperson explained, “Since returning to the office, we’ve run pilots and conducted surveys with Cloud employees to explore different hybrid work models and help shape the best experience. Our data show Cloud Googlers value guaranteed in-person collaboration when they are in the office, as well as the option to work from home a few days each week. With this feedback, we’ve developed our new rotational model, combining the best of pre-pandemic collaboration with the flexibility and focus we’ve all come to appreciate from remote work, while also allowing us to use our spaces more efficiently.”
The move comes as Google downsizes its real estate footprint amid broader cost-cutting. However, it hasn’t yet specified regions or buildings it plans on downsizing.
In its fourth-quarter earnings call, Google executives said it expects to incur costs of about $500 million related to reduced global office space in the current quarter, and warned that other real estate charges are possible going forward. Earlier this month, SFGate reported the company will be ending leases for “a number of unoccupied spaces” in the San Francisco Bay Area, the region where its headquarters are located.
The cloud unit, which makes up more than a quarter of Google’s full-time workforce, is among the highest-growth areas at the company, but is not profitable.
In the fourth quarter, Google Cloud brought in $7.32 billion, growing 32% from the prior year, considerably faster than the company’s overall growth rate of less than 10%. But that revenue figure was less than Wall Street consensus expected, and the Cloud unit is still losing hundreds of millions of dollars every quarter — $480 million in the fourth quarter, although that was nearly half of the loss a year prior.
Overall, however, Google earned $13.62 billion in net income during the quarter, and $59.97 billion for all of 2022. Both were significant drops from 2021.
Welcome to the ‘neighborhood’
Under the new arrangement, teams of 200 to 300 employees “and partners” will be organized into “neighborhoods” that may also include “partner teams that are a part of other organizations, such as Finance, People Operations, etc.,” the FAQ read. Each neighborhood will have a vice president or director who will be responsible for allocating space in the neighborhood.
Employees will generally alternate days they’re in the office, either Monday and Wednesday, or Tuesday and Thursday. They will be in two days a week, a change from the company requiring employees to come in three days a week.
“Neighborhood leads are encouraged to set norms with their teams around sharing desks, ensuring that pairings of Googlers have conversations about how they will or will not decorate the space, store personal items, and tidiness expectations.”
In addition, the FAQ said that employees with computer workstations will no longer have those workstations located directly under their desks, but instead will have to look up its location in a database or put in a ticket for troubleshooting. Over time, employees are expected to transition to CloudTop, a virtual desktop tool that’s so far reserved only for Google employees.
The FAQ said it will also be putting a cap on number of rooms to be taken for meetings, noting conference rooms are “already difficult to book.” Employees will be discouraged from “camping” in a conference room, it added.
As for Covid-19, desks will be sanitized daily and employees will get a notification if someone in their area tests positive and reports it to Google.