A new policy will make it harder for Googlers to advance within the organization. Google informed its employees that fewer people would be offered promotions to senior levels this year compared to the prior years.
In an effort to rein in runaway expenditures, the search giant’s decision to bolster fewer workers to senior management is “to ensure that the number of Googlers in more senior and leadership roles grows in proportion to the growth of the company.”
With fewer promotions available, the tech behemoth is not so subtly pitting people against each other. Software engineers and other tech professionals must substantially improve their productivity. If they don’t aggressively exceed their manager’s expectations, there may not be a path forward within the company.
From Pampering Workers To Cutting Costs
This policy directly counters the last decade of pampering employees with nap pods, generous total compensations and stock grants, great health benefits, free food served at cafes and restaurants onsite, kitchens filled with snacks, laundry services, fitness centers and places to get massages or do some yoga.
Silicon Valley hired aggressively over the last number of years without pegging the costs of all the new hires to revenue growth. Once inflation roared and interest rates hiked, Big Tech CEOs admitted their misjudgments of being too optimistic. As tech companies’ stock prices plunged and borrowing costs increased, leadership at these organizations adopted cost-cutting measures.
The new austerity is clearly indicated in an email sent to Google to staff on Monday, stating, “The process is manager-led and will be largely similar to last year—though with our slower pace of hiring, we are planning for fewer promotions into L6 and above than when Google was growing quickly.” According to the staff memo, there are two pathways to a promotion: you can either be nominated by your manager, or you can “self-nominate” between March 6 to March 8. The L6 designation refers to the first layer of senior management, which includes employees with 10 years of experience or more.
The new program is another blow to workers shortly after the search giant coldly laid off 12,000 people via email. There was no clarity over why people were selected for downsizing, and Google workers were not told if it was due to their ratings, compensation or tied to any specific metrics. CNBC reported at the time of the layoffs, “Employees have flooded Dory, the company’s question-asking platform, and set up virtual communities to figure out who’s been laid off and why.”
In a companywide memo to staff, Google CEO Sundar Pichai wrote, “I take full responsibility for the decisions that led us here and over the past two years, we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
Performance Ratings
Amidst pressure from an activist hedge fund, adverse market conditions and a need to cut costs, Google launched a ranking system and performance improvement plan—Googler Reviews and Development (GRAD).
In November, the Information reported that Google managers were asked to rank 6% of employees as low performers, compared to the traditional 2%. In a prior announcement, supervisors were told to cut down on the inflated ratings.
Chris Pappas, a Google spokesperson, said in an email at the time that the program was implemented to “help employee development, coaching, learning and career progression throughout the year.” Pappas added, “The news system helps establish clear expectations and provide employees with regular feedback on their performance.”
The tech giant uses a five-point rating scale. To avoid any shocks to the system, managers are required to conduct a “support check-in” before they assign a rating below “significant impact.” This will give the employees the opportunity to improve upon the manager’s feedback before the start of annual reviews. Google estimates that a large percentage of its employees will receive a favorable “significant impact” rating.
Bloated Headcount
The recent decision to stifle middle-manager promotions is most likely Google’s way of walking back the trend of aggressively over-hiring people over the years and driving up costs. Alphabet, Google’s parent company, has consecutively expanded its workforce by at least 10% annually since 2013, according to CNBC. The company increased its headcount by over 20% in 2018 and 2019. The growth continued, adding over 16,000 new hires in 2020 and 21,000 employees in 2021.
The Law Of Scarcity
According to the Law of Scarcity, if something appears to be limited in supply, the perception of its value significantly increases. The fewer senior promotions available at Google, the more highly coveted those spots will be.
Employees will work harder to get noticed and promoted at the company. This, coupled with an already-existing threat to job security amidst a white-collar recession, with over 126,000 tech workers laid off in 2023, will light a fire under the workers to stop their complacency and outperform each other.
Last year, the Wall Street Journal reported that Pichai wanted to boost efficiency by making his company 20% more productive.
The Erasure Of Middle Managers In Tech
In an earnings call on Feb. 1, Meta CEO Mark Zuckerberg pointed out the proliferation of managers within his company, claiming it creates unnecessary bloat and spiraling costs. According to reporting by the Verge, Meta is making 2023 the “year of efficiency.”
Zuckerberg called out the inefficiencies within the large social media platform, which is also happening at other large tech companies, stating, “I don’t think you want a management structure that’s just managers managing managers, managing managers, managing managers, managing the people who are doing the work.”
Venture capitalist David Sacks said on the All-In podcast, a show for the tech, startup and VC community, that the mindset of workers shifted to everyone wanting to be a manager. According to Sacks, a software engineer no longer wants to be just a great individual contributor, but feels the way to succeed is by becoming a manager leading a large team. With this mindset, the top-gifted developer stops coding, which is what the person is great at, and becomes a manager. The coding star then builds a team.
Over time, the group escalates to five or 10-plus staff members. The once-rockstar software developer, instead of coding, spends the day managing the minutiae of the daily workflow. This trend is replicating throughout the organization, resulting in the aggressive hiring of subordinates and substantially increasing operating costs.
Source: Forbes
