Changes to Google’s employee evaluation system stir fears of layoffs

After several major tech companies announced layoffs due to macroeconomic headwinds in the past few months, Google is now under the spotlight as news reports this week predict the company will cut at least 10,000 jobs.

The predictions are based on a report of data, which said that under the Google Review and Development (GRAD) program launched earlier this year, managers were told to assign low performer ratings to at least 2% of employees compared to the old performance review process. % under.

Some industry observers are predicting that the reported move to increase the number of employees ranked as underperformers foreshadows the layoffs of those employees.

Google’s total number of full-time employees stood at 186,779 at the end of the September quarter, an increase of 24.5% year over year. Six percent of Google’s current headcount would be about 11,000 people.

Google has not announced the layoffs, and declined to comment on the specifics of the data report. The company, however, maintains that GRAD was introduced to support employee development.

“Earlier this year, we launched Googler Review and Development (GRAD) to support employee development, coaching, education and career advancement throughout the year. The new system helps establish clear expectations and provide regular feedback to employees,” according to a statement from Google.

The grad was announced by CEO Sundar Pichai in May after about 47% of its employees voted against the long-standing review process, which takes place twice a year.

Under GRAD, a director is expected to hold a “support check-in” meeting before issuing a low performance rating or a rating below “significant impact,” according to a source on condition of anonymity.

The meetings give employees an opportunity to adjust their work to meet their goals, according to the source, who added that a vast majority of employees at the company have “significant impact,” based on a five-point rating scale.

Still, CNBC reported that company employees are concerned about the new performance review process because the evaluation under the system comes at a time when the company is looking to cut operating costs. According to the report, low performance ratings have already started rolling out for some employees.

Googlers got bad news in July when the company first announced it was putting in place a hiring freeze and followed it up with a program called the Simplicity Sprint to boost employee efficiency and productivity. While announcing the program, CEO Sundar Pichai not only pointed to macroeconomic uncertainty but also said the company’s productivity is nowhere near where it should be based on headcount.

The changes were announced after Google’s parent company Alphabet reported consistently weaker-than-expected earnings for the past two quarters

Google revenue growth is slow

Later, for the third quarter ended in September, the company continued to show a slowdown in overall revenue growth and again posted lower-than-expected numbers. While Google Cloud revenue grew 38% year-over-year to $6.9 billion, giving the company a much-needed boost, overall revenue growth fell to 6% as ad revenue fell.

Additionally, top executives, during an earnings call with analysts, said headcount growth accounted for most of the company’s operating expenses for the quarter. The company added a total of 12,765 people in the quarter ended in September, including 2,600 Mandient employees who joined the cloud division.

For the quarter ending in December, the company said it expects to hire fewer than it did in the third quarter and to add only key roles focused on top engineering and technology talent.

Meanwhile, layoffs at Meta, Amazon, Microsoft, Salesforce and Oracle are likely not boosting worker confidence.

Facing slower revenue growth due to inflation, fears of a recession and other macroeconomic conditions, big tech companies that have yet to cut jobs are now considering doing so, said JP Gounder, principal analyst at Forrester. “They want to set up the finances for success in 2023,” Gounder said.

Ultimately, if Google does implement layoffs, the GRAD system suggests that at least the layoffs will be on a rational, targeted basis, compared to the chaotic and drastic firings at Twitter, where new owner CEO Elon Musk cut half the workforce shortly after taking over. The reins of the social media giant.

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