Facing the greatest pressure in over twenty years, Google is reported to have unstable morale, with only the AI department maintaining high spirits

Just last week, Alphabet and Google CEO Sundar Pichai made headlines due to executive layoffs, and now he has become the focus of media attention again for the challenges of managing Google.

At the end of April this year, Google's parent company Alphabet announced that its first-quarter revenue and profit both exceeded expectations with double-digit growth, with revenue increasing by 15% year-on-year, marking the highest quarterly growth rate in two years, and announced its first-ever dividend. The performance alleviated investors' concerns about Google's position in the artificial intelligence (AI) race, and the financial market reacted quickly. On the first trading day after the earnings report was released on April 26, Alphabet's stock price surged by 10%, the largest daily increase since July 2015. However, the joy on Wall Street did not resonate with Google employees.

CNBC reported that at the company-wide meeting held a week after the quarterly report was released, although executives were enthusiastic about the performance, employees did not share the same sentiment. One employee commented during the meeting:

"We have noticed a significant decline in morale, an increase in distrust, a disconnect between leadership and employees, and how does leadership plan to address these issues and rebuild trust, morale, and cohesion, which are the cornerstones of our company's success?"

This comment became a highly praised post on Google's internal forum.

"Although the company's performance is outstanding and profits have reached record highs, many Google employees have not received meaningful salary increases," another popular comment on the forum raised this question.

These comments are just the tip of the iceberg regarding the challenges faced by Google's management. Reports indicate that Google is under the greatest pressure it has faced in its twenty years as a public company, and CEO Pichai, who has been at the helm since 2015, is facing similar pressures.

The report mentioned that conversations with more than a dozen Google employees, along with recordings and internal letters, show that during 2024, due to product missteps in the first half of the year, as well as internal restructuring and layoffs, many employees have questioned Pichai's vision. In the second half of the year, as Google launched a series of eye-catching AI products, Pichai's position improved somewhat, but doubts still lingered internally.

The report also pointed out that this year, morale within Google has been shaky. In order to invest more in artificial intelligence (AI), the company is making efforts to cut costs, which has led to feelings of division among some internal teams and posed challenges for Pichai.

Some employees revealed that in Google's AI and DeepMind departments, morale is generally high due to significant investments. However, in other departments, cost-cutting, bureaucracy, and declining trust in leadership have dampened morale.

Coincidentally, just last week, media reported that Pichai revealed the achievements of Google's cost-cutting and efficiency-boosting efforts. At last Wednesday's all-hands meeting, Pichai stated that to improve efficiency, Google’s management has laid off one-tenth of its workforce since last year. Overall, the number of managers, directors, and vice presidents among Google employees has decreased by 10%. Some managers have been reassigned to individual contributor roles, meaning they are no longer responsible for other employees A Google spokesperson later stated that the structural changes described by Pichai would be implemented starting in 2023, and it does not indicate that the number of layoffs at Google exceeds previously reported levels