Alphabet CFO Ruth Porat
FABRICE COFFRINI | AFP | Getty Images
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; San Francisco; Seattle and Sunnyvale, Calif. — 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 notes.
“Most Googlers will now share a desk with one other Googler,” the internal document states, noting that 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.”
For anyone coming in on their unassigned days, 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” from hybrid work. The new workspace plan is not a temporary pilot, the document notes. “This will ultimately lead to more efficient use of our space.”
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’s meme 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 layered on a photo of a bird putting his hand on his head. “A simple ‘We are cutting office space to reduce costs’ would make leadership sound more believable.”
Google did not immediately respond to requests for comment.
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 Q4 2022 earnings call, Google executives said it expects to incur costs of about $500 million related to reduced global office space in Q1, 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 than10%. But that revenue figure was less than Wall Street consensus expected, and the Cloud business is still losing hundreds of millions of dollars every quarter — $480 million in Q4, 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 VP 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 adds.
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.