Google to pause all hiring for two weeks(techcrunch.com)
techcrunch.com
Google to pause all hiring for two weeks
https://techcrunch.com/2022/07/20/google-to-pause-all-hiring-for-two-weeks/
84 comments
>There is such a taboo around pay cuts
Yes. But much less so about reduced bonuses, RSU grants (and esp. stock appreciation), and not matching inflation. At a lot of tech sector companies among others, you're already seeing pretty large effective comp decreases.
It's also the case that, as people often observe, large comp increases often come from switching jobs and that's probably going to be more difficult in general for the next few years.
ADDED: And one of the escape valves for people at smaller companies especially over the last year or two has been to try to get a job at Big Tech. (This doesn't only apply to developers.) Increasingly this looks to be a much tougher option.
Yes. But much less so about reduced bonuses, RSU grants (and esp. stock appreciation), and not matching inflation. At a lot of tech sector companies among others, you're already seeing pretty large effective comp decreases.
It's also the case that, as people often observe, large comp increases often come from switching jobs and that's probably going to be more difficult in general for the next few years.
ADDED: And one of the escape valves for people at smaller companies especially over the last year or two has been to try to get a job at Big Tech. (This doesn't only apply to developers.) Increasingly this looks to be a much tougher option.
I don't think your use of "levered" makes sense, and I don't think GOOG is the "canary in the coal mine" - basically the entire small-cap NASDAQ has already been obliterated - but otherwise your point stands.
> There is such a taboo around pay cuts
One side effect of inflation being ~10% is that if you want to give your staff a pay cut all you have to do is do nothing.
One side effect of inflation being ~10% is that if you want to give your staff a pay cut all you have to do is do nothing.
But it only works if you're able to raise prices for your customers. Often that's hard and sometimes impossible.
Are raised prices the very definition of inflation?
The average age of a public company has been declining for decades: 61 years in 1958, and currently 18 years. No company is immune to the practice. Google isn't going anywhere, but we should be expecting companies to come-and-go more frequently than the past. What's unusual today, and more Google-specific, is that it's one of a few companies absolutely dominating the S&P: just 6 stocks make up over one-quarter of the total capitalization.
https://austinwealthmgmt.com/wp-content/uploads/2020/05/SP-5...
https://austinwealthmgmt.com/wp-content/uploads/2020/05/SP-5...
And Apple is like 4% of the global investable equity market (weighted by market cap)
"time and again"? We've only had two tech booms and one was a lot more speculative than the other.
Yes, Google makes money from ads. Then again, advertising is to "describe or draw attention to (a product, service, or event) in a public medium in order to promote sales or attendance." Google is in the business of connecting people with what they want, more of a personal assistant than a billboard.
Running a campaign on Google is a lot more like having a robot salesperson than a billboard. There are different kinds of advertising, such as general brand awareness which indeed might not be worth keeping short term. But if I were in the business of selling widgets, I think I'd cut the r&d budget rather than firing salespeople who are directly in the conversion path that brings in dollars today.
Yes, Google makes money from ads. Then again, advertising is to "describe or draw attention to (a product, service, or event) in a public medium in order to promote sales or attendance." Google is in the business of connecting people with what they want, more of a personal assistant than a billboard.
Running a campaign on Google is a lot more like having a robot salesperson than a billboard. There are different kinds of advertising, such as general brand awareness which indeed might not be worth keeping short term. But if I were in the business of selling widgets, I think I'd cut the r&d budget rather than firing salespeople who are directly in the conversion path that brings in dollars today.
>There is such a taboo around pay cuts
Huh? Every time the stock price goes down people's comp is cut since most of their comp is RSUs.
Huh? Every time the stock price goes down people's comp is cut since most of their comp is RSUs.
Yes, but it's mostly cuts in actual wages/base pay that are sticky. People obviously aren't happy if fairly predictable bonuses and RSUs get cut but most understand at some level those are variable and tied to company performance. And if the same thing is happening at most places they have little choice but to just deal with it.
Sure but OP claimed there are no cuts thus the only option is to stop hiring and do layoffs. In fact there are automatic cuts (via RSUs) and the follow-up approaches are hiring freezes and layoffs. I'm merely arguing that OP's point isn't valid.
"Pay cuts" via stock going down for the base company are pay cuts that do nothing to improve the company's financial position. Google-the-employer, even looking at them only as an employer, is no better off if employees have less total comp through stock losses than it is if they had stock gains. It does nothing to improve their bottom line -- and in fact, with the way that tech companies grant equity comp (by targeting a dollar amount at the time of the grant and then granting enough shares to hit that dollar amount), it actually worsens their position every time they give a grant (they have to give more shares to hit the same dollar amount).
In contrast, inflation or explicit wage cuts are things that, ceteris paribus, every employer would like to do, and does improve their bottom line. (But explicit wage cuts are such a morale killer that they're de facto impossible right now.)
In contrast, inflation or explicit wage cuts are things that, ceteris paribus, every employer would like to do, and does improve their bottom line. (But explicit wage cuts are such a morale killer that they're de facto impossible right now.)
Nah you record the expense over the vesting period. Google can just issue new shares. It’s not really worse unless things get really bad.
I think OP was referring to salary cuts. Stock is known to carry risk so it being "cut" isn't taboo, but salary, which is supposed to be guaranteed, is.
Sure but in the context of saving the company money to prevent layoffs they're identical. Companies don't cut salary because they have a found a better way to cut comp costs without upsetting workers as much.
They absolutely aren't identical. If you have a grant for, whatever, 1,000 shares a year, and the shares used to be worth $100, but now they're worth $50, the company is still giving you the same things it gave before (X% of the total value of the company). It will still have to go to the board and ask for more dilution to create new share pools at the same time as it did before. Its cash-on-hand situation is no better than before.
> I expect GOOG to be the epicenter of tech worker pain for this leg of the cycle.
Given what you just said about how people cut costs during a down cycle, why GOOG and not AMZN? Seems like discretionary spending (and a lot of Amazon's sales are impulse-buy junk rather than essentials) is also likely to take a huge hit.
Given what you just said about how people cut costs during a down cycle, why GOOG and not AMZN? Seems like discretionary spending (and a lot of Amazon's sales are impulse-buy junk rather than essentials) is also likely to take a huge hit.
Amazon makes most of their money from AWS. The webstore is the majority of the business - but in some ways it's irrelevant.
And AWS is expensive. Hard up businesses could cut serve costs
With inflation, they don't need actual pay cuts to have real pay cuts. That's part of the reason why it's unusual to have high unemployment and high inflation (definitely not impossible though).
What percentage of Google’s ad revenue come from (unprofitable) startups?
Yes than you probably think. This was true in the dot com era, but much less true today.
Also recently:
Google pausing hiring for two weeks (seekingalpha.com)[1] with 14 comments
Google, GitHub, and Azure are freezing hiring effective immediately (linkedin.com)[2] with 24 comments
[1] https://news.ycombinator.com/item?id=32169672
[2] https://news.ycombinator.com/item?id=32185152
Google pausing hiring for two weeks (seekingalpha.com)[1] with 14 comments
Google, GitHub, and Azure are freezing hiring effective immediately (linkedin.com)[2] with 24 comments
[1] https://news.ycombinator.com/item?id=32169672
[2] https://news.ycombinator.com/item?id=32185152
Hired 10,000 people in Q2 this year alone? What percentage of those people actually do anything of value besides cash the company’s checks? That’s actually staggering to me. Cloud division I can see growing. What else?
A lot of very smart people have also looked at the growth prospects of cloud and urged more investment, but I am not sure if their claims have panned out. The reality is that after a decade of heavy investment Google Cloud is still a distance 3rd. To make matters worse, the Cloud division's growth is mostly on the cost side of the balance sheet. GCP has a larger more expensive staff than its two leading competitors and a very unfavorable cost structure on a unit basis. (Perhaps this problem is a consequence of people advocating for more investment in Cloud). Given that Cloud a much bigger cost center than Search and somehow grows more year over year I would actually think that Cloud is what ultimately destroys the company.
Google pretty much has to make Cloud work eventually or they're toast. (Or at least a much shrunken and less relevant company that certainly needs a fraction of their current engineering staff.)
What you and the parent comment are saying is incredibly interesting. Do you have any recommended reading regarding this?
The usual narrative is this
1. Ad cost-per-click goes down over time. At some point, the entire population of earth will be fully online and there will be no natural growth in advertising. The ad business stagnates. Google's stock price depends on growth.
2. Google has a bazillion incredibly highly paid employees. They don't just need billion-dollar industries to supplement ads, they need 100-billion-dollar industries. There are not that many of these industries in existence. Cloud is one of them.
3. Cloud services scale well, so nothing stops AWS from eventually reaching something ridiculous like 90% market share. This means that it is not enough to be an "also-ran."
4. Cloud eventually failing and being decommissioned would so permanently trash Google's reputation for b2b services outside of advertising and would so thoroughly gut the company (laying off 10,000s of workers) that the company would never recover.
I am a Googler. I don't work in Cloud. Absolutely none of this is based on internal information. I have no actual idea if this reasoning matches anything that internal leaders think.
1. Ad cost-per-click goes down over time. At some point, the entire population of earth will be fully online and there will be no natural growth in advertising. The ad business stagnates. Google's stock price depends on growth.
2. Google has a bazillion incredibly highly paid employees. They don't just need billion-dollar industries to supplement ads, they need 100-billion-dollar industries. There are not that many of these industries in existence. Cloud is one of them.
3. Cloud services scale well, so nothing stops AWS from eventually reaching something ridiculous like 90% market share. This means that it is not enough to be an "also-ran."
4. Cloud eventually failing and being decommissioned would so permanently trash Google's reputation for b2b services outside of advertising and would so thoroughly gut the company (laying off 10,000s of workers) that the company would never recover.
I am a Googler. I don't work in Cloud. Absolutely none of this is based on internal information. I have no actual idea if this reasoning matches anything that internal leaders think.
Adwords executives eager to help you maximise the value of your future Adwords spend.
Google has >= 100k employees. With a “healthy” staff turnover rate of 10%, they’re not growing.
10% per quarter? What is the unhealthy rate?
That would be 40%
I'm guessing it's 10k total hires not +10k net hires.
Even with that distinction and knowing Google's size, that's still a staggering figure for one quarter.
These stats are part of our SEC filings I believe. Various sites graph it.
https://www.statista.com/statistics/273744/number-of-full-ti...
https://www.statista.com/statistics/273744/number-of-full-ti...
The check cashing is outsourced. I’ve toured the facility where it happens.
Does paying by cheque have additional charges? I'm surprised it's common enough to need a "facility".
Paying by credit card or an electronic transfer presumably doesn't need an office of people shuffling paper around.
(I haven't used a cheque since about 2010, and I've never seen them used between businesses.)
Paying by credit card or an electronic transfer presumably doesn't need an office of people shuffling paper around.
(I haven't used a cheque since about 2010, and I've never seen them used between businesses.)
I don’t know of any merchants that charge extra for check processing. Depending on the volume and average value of the checks, processing fees may be cheaper than credit card interchange.
Check processing typically has a fixed cost per check. This may fluctuate at lower volumes, but the price plateaus as you reach 10K checks per month. Say you get to $2 per check, and interchange is 1%. The merchant retains more revenue for check payments over $200.
The downsides are it takes 2-3 additional days to get the revenue, and there is no notion of a “dispute” for checks. In the case of fraud, you lose. However, there is less risk of this happening in B2B sales, which is the primary use case for checks these days.
Check processing typically has a fixed cost per check. This may fluctuate at lower volumes, but the price plateaus as you reach 10K checks per month. Say you get to $2 per check, and interchange is 1%. The merchant retains more revenue for check payments over $200.
The downsides are it takes 2-3 additional days to get the revenue, and there is no notion of a “dispute” for checks. In the case of fraud, you lose. However, there is less risk of this happening in B2B sales, which is the primary use case for checks these days.
Does that figure include interns and other temporary workers? If so, it’s easy to see how Google could hire 10,000 of those without growing the full time staff.
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There are still companies out there handing out physical checks??
Google offers a lot. They want to offer more. The market will determine what's valuable.
Google products are mostly over rated.
Google products are usually loss leaders, so as a user they feel much better to use than dedicated services that are more clearly monetized e.g. Yelp allowing businesses to remove reviews compared to Google Maps reviews, Google Docs being free and decent compared to Microsoft's Office suite.
While Google's cloud revenues are a fairly small portion of the total overall, Google Workplace sales (i.e. supported suite) would still be pretty significant at many companies. I'm not sure it's fair to call it a loss leader.
I commented on the last post about Google hiring slowdowns, hoping that it wouldn't hit technical workers as hard, but it looks like that's not the case. I've got an L3 interview literally tomorrow. Can anyone with more insight into hiring practices comment on whether that's just a complete wash? (Outside of getting more interview experience, that is).
I know getting an offer "two weeks" (yeah, right) from now isn't gonna happen, but is there anything measurable I actually gain from doing well on the interview, e.g. skipping the phone screen or giving more positive data to the hiring committee if I end up applying again?
I know getting an offer "two weeks" (yeah, right) from now isn't gonna happen, but is there anything measurable I actually gain from doing well on the interview, e.g. skipping the phone screen or giving more positive data to the hiring committee if I end up applying again?
Interview results live in the system forever so if you interview well but don't end up with an offer you will be a target for recruiters later and have an advantage in the hiring committee on the next attempt.
If you've already matched with a team, the key is knowing what that team is doing and whether they are on a company-critical path. I suspect the number of such L3 positions is low, but it is definitely not zero.
If you've already matched with a team, the key is knowing what that team is doing and whether they are on a company-critical path. I suspect the number of such L3 positions is low, but it is definitely not zero.
Don't take any gap between L3 and your current job of you have one. They laid off my step mom a few years ago right after she started working. Luckily, she was able to get unemployment, but L3 should not be trusted.
Was she working as a SWE? I don't believe there have ever been SWE layoffs at Google.
First time for everything, I guess.
Oh nice I had an interview last week... Let's see how it goes for candidates in middle of the process...
In my case the only step left was supposed to be getting the offer and compensation approved, surprise!
Ouch good luck for it, hope it works out. You've passed the committee I'm guessing?
Yup, passed the hiring committee. Also the team is happy to have me.
:'(
:'(
Don't worry, it is highly unlikely Google doesn't offer someone who has already cleared HC. If they slow down, it would most likely mean it for new candidates who still haven't finished the interview process.
I had someone from Google Recruiting reach out to me Friday. I wonder if he knows about the hiring freeze.
According to a friend, Sundar sent out the company wide memo on Tues
How are others doing these days? Is Amazon, et al. slowing down hiring as well?
Our company (~300 engineers, fintech clients) is slowing down and the bench (people who don't bring in money at the moment) is as large as it ever was.
Our company (~300 engineers, fintech clients) is slowing down and the bench (people who don't bring in money at the moment) is as large as it ever was.
Those big and insanely rich corporations are suffering big time from the nasty effect of Price's Law.
In my opinion this is a good thing, otherwise their power would be indestructible, they already have waaay too much power.
In my opinion this is a good thing, otherwise their power would be indestructible, they already have waaay too much power.
...which Price's Law is this? The one I could find referred to the relationship between scientific literature on a subject and the number of authors publishing on it...
That one, yes, generalized to any organization.
https://dariusforoux.com/prices-law/
https://dariusforoux.com/prices-law/
It's certainly true to some degree and it's pretty clear in areas like research.
That said, even with the sales example, the superstar sales reps I know are generally selling to particularly lucrative industries and, critically, they're supported by a lot of other sales and marketing people (to say nothing of product) without which they'd be a whole lot less effective. Oh, and a company actually needs finance people and backoffice people to process orders etc.
I don't doubt there's some truth to the notion. But people look at other groups even within their company and wonder what all those people could possibly be doing. And, guess what, people there are probably looking at your group and thinking the same thing even though you think you're ridiculously understaffed.
That said, even with the sales example, the superstar sales reps I know are generally selling to particularly lucrative industries and, critically, they're supported by a lot of other sales and marketing people (to say nothing of product) without which they'd be a whole lot less effective. Oh, and a company actually needs finance people and backoffice people to process orders etc.
I don't doubt there's some truth to the notion. But people look at other groups even within their company and wonder what all those people could possibly be doing. And, guess what, people there are probably looking at your group and thinking the same thing even though you think you're ridiculously understaffed.
Two weeks seems like a really short time to have any effect... aren't the open positions and people applying for them going to be almost identical two weeks later?
My interpretation is that they are taking time to reassess their open positions, and the list of positions will be smaller when they reopen hiring.
Until further notice is more palatable after a short notice.
This might have less effect on direct hiring than on attrition. It's a signal that the next review cycle at each of these companies will be absolutely brutal. As a result, both the truly marginal and the good-but-undervalued employees will be flying for the exits. Net effect might be greater than if only hiring had stopped.
If Google and mega cap gang are scared and slowing hiring where are their current employees going to go that doesn't have a greater risk of layoffs?
Probably nowhere. There are probably boring industries that might be more stable but they would likely involve a pay cut so expected value probably suggests staying put.
Yes, there might be a pay cut, but half of that pay cut's already there (via reduced stock prices) and the rest will come anyway for someone about to be PIPped out. Expected value then is zero. There are still other companies both in and outside of tech - possibly including the one we both worked for - that are still hiring and offer pay that's still good by most standards. There's contracting, which in past downturns has often picked up a bit to fill gaps left by hiring freezes. Also, for someone who has been pulling down GAMMA pay for even a few years, "nowhere" is very much an option either temporarily or permanently. I'm pretty glad to be "nowhere" myself. ;)
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Archived copy without GDPR nag screen:
https://web.archive.org/web/20220720184258/https://techcrunc...
https://web.archive.org/web/20220720184258/https://techcrunc...
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Beside selling ads. Does it earn money in any other way?
I think they have managed to get advertising down to the mid 80% of total revenues. Wall st street would obviously prefer a bit more diversity of sources.
In general the company appears to have been drifting around rudderless for the past decade at least. Perhaps this is part of a recognition that they need to reboot a lot of process, but based on past performance I doubt it.
In general the company appears to have been drifting around rudderless for the past decade at least. Perhaps this is part of a recognition that they need to reboot a lot of process, but based on past performance I doubt it.
We know from the Oracle vs Google court case documents[0] that through the Android OS Google had made 22 billion $ in profit, as of 2016. It is a drop in the bucket for a company the size of Google, and the platform was obviously not bought for the direct profit generating capabilities of it. But it seems it has certainly paid for it self.
[0] https://www.theverge.com/2016/1/21/10810834/android-generate...
[0] https://www.theverge.com/2016/1/21/10810834/android-generate...
A lot of that might just be internal payments from Google search to Android for Android user ad income? What other revenue sources does Android have? Google Play Store?
> What other revenue sources does Android have?
OEMs like Samsung, who want Android+Google Apps and not just AOSP?
OEMs like Samsung, who want Android+Google Apps and not just AOSP?
Revenue, yes billions.
Profit? We'll see soon if it's changed. Q2 earnings report is on Tuesday.
You can find previous reports at abc.xyz
Profit? We'll see soon if it's changed. Q2 earnings report is on Tuesday.
You can find previous reports at abc.xyz
Thank you for the link.
I will study that. Since I think it is interesting to see how they earn on essentially harvesting user data and sell adds based on that.
The ads I see are completely useless to me so it is a mystery why companies want to pay for that.
Useless to you might not be useless to the advertiser.
Read their and compare it to other regular companies, this is a company that makes 20bn+ a quarter but can manage double digit revenue growth year on year
1. The fluctuations in stock prices. Like many tech companies, Google uses its shares in place of currency. This work great when prices are going up.
2. Business spending on advertising. Despite ambitions in other areas, the company still just mostly sells ads. One of the first things companies cut back on when they start hurting is advertising.
When the stock market declines because the business cycle turns, Google gets a double whammy. In many ways, it's the canary's canary in the coal mine. Doubly levered to the business cycle.
There is such a taboo around pay cuts, that then the inevitable downturn happens, the only option is to first stop hiring and then start laying off.
I expect GOOG to be the epicenter of tech worker pain for this leg of the cycle.
During these booms, tech leaders take on a mythological quality. To even suggest that they could begin a protracted decline seems absurd. But it has happened time and again. Maybe it's this time or the next cycle that does it, but there's no version of the future where GOOG retains its dominating position.