The CEO of Alphabet and Google 'Sundar Pichai' expressed his wish to make the company at least 20% more efficient. To make that happen, the company might have to lay off some of its employees. Considering the slow economic conditions and the rapid hiring pace of Google in recent years, it seems that will be the most obvious option.
Recently, Alphabet CEO Pichai revealed details on how they plan to make the company more efficient at the Los Angeles conference. According to him, a slowdown is witnessed in the ad spending, which is eating away at the company's revenue. On top of that, the company is also facing economic uncertainty in the US and other major markets.
A closer look at the macroeconomic situation makes it clear that the current situation is very uncertain. The macroeconomic situation and consumer spending or ad spending go hand in hand. So it makes sense to think that ad spending might stay depressed for the foreseeable future.
According to Pichai, the macroeconomic factors are not in their control. On top of that, the headcount at the company has also ballooned.
This clearly tells us that the company's expenses have increased, but the revenue has dropped. And the only clear-cut and easiest solution is to decrease the headcount.
As a company, Google wants to ensure that it continues to work with fewer resources. But to do that, they will have to make sure that they are prioritizing the right things. This will lead to better productivity and the surety that they are having an impact on things.
When the CEO was asked about his plans to make Alphabet more efficient, he cited an internal project called 'Simplicity Sprint'. This project aimed to focus the company on getting faster and better results.
This news comes after the company has witnessed weaker than expected earnings in its 2nd consecutive quarter.