A memo was sent to Google employees from the company’s CFO Ruth Porat and senior VP Prabhakar Raghavan stating that employee perks, such as free snacks, laundry services and company lunches, would no longer be on offer.
The tech giant will also be cutting back on fitness classes available to workers, personal equipment such as laptops, and will be slowing down its recruitment process.
The Google execs explained these cuts were primarily due to increased economic strain and desires to prioritise AI development.
"This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward — particularly in AI," they explained.
The move to cut perks comes only months after Google was added to the list of tech giants making significant layoffs, the company sacking 12,000 people in January, and points at the wider movement of businesses looking for ways to cut costs in the face of economic strain. So far, many of these cuts have happened at the employee level, with jobs and perks being compromised.
The original perks office
Google has long-been renowned as the first major tech company to prioritise employee perks and to cultivate a ‘fun’ office environment.
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Benefits Overview and Enrollment
Over the years, these lavish perks have included massages, meals out, cooking classes and free gym memberships. Consequently, the tech company quickly developed a reputation as a sought-after place to work in the tech industry.
Google isn’t the only company that has had to compromise its reputation and brand for the sake of cutting costs. Last month, John Lewis announced it was axing staff bonuses and could be ending its 100% employee-owned model.
Dubbed the ‘perk-cession’, this highlights a growing trend of companies having to cut employee benefits due to rising costs and more wary consumers, sacrificing their brand image and attractive position to workers.
A race for AI
The name ‘ChatGPT’ was unknown to many even as recently as a few months ago. Suddenly, it’s in the minds and mouths of business founders and workers alike. Attempting to keep up with the AI-hype, Google announced its own AI programme, , in February this year.
Cuts to Google’s costly employee benefits will certainly give the compnany more cash to spend on AI progression, as it races to keep up with Microsoft and other tech companies developing AI products. But perk cuts may have the consequence of threatening employee-retention and pave way for more accepted ‘benefits’ (such as remote work) to be cut.
On LinkedIn, users have shared their perspective on the perk-cuts. Albert Fong, Product Marketing Leader at D&I-focused tech company Kanarys, says that despite lavish perks being a tool to attract talent, it’s important for employees to recognise and preserve the ‘right perks’.
He comments: “From endless free meals and snacks and massages classes, to personal equipment and designated recreation areas, (Google) employees have certainly enjoyed grandiose perks along with high salaries and stock grants. While employees may argue they deserve them, the reality is these perks also created and fostered a huge sense of entitlement, and arguably, a lack of perspective.
“Don't get me wrong. Perks matter, but the right perks matter even more. I'm a strong believer of the importance in building people who then build the business. In the grander scheme of things, there are other benefits employees should fight to preserve such as remote and hybrid work, professional development, and mental health support among others,” Fong continues. “I'd choose those over yoga classes or endless snacks any day. If employers are smart, they will continue to offer and support work-life balance initiatives. Rule of thumb: People don't stay for perks. They stay with companies who invest in them.”