Alphabet’s Sundar Pichai Admits Some Google Offices Are Like ‘Ghost Town’

The CEO of both Alphabet and its Google division has responded directly to staff pushback of the firm’s decision that cloud employees should share desks.

During an all-hands meeting last week, CNBC reported that CEO Sundar Pichai addressed employee criticism of the cloud unit’s new desk-sharing policy.

Pichai defended the decision, reportedly saying that “it feels like a ghost town” in some of the company’s offices, and he said that some staff are coming into the office “only two days a week.”

Hot desking

Alphabet of course announced in January that it will cut 12,000 jobs worldwide, or roughly 6 percent of its workforce.

Alphabet said it would take a charge of between $1.9 billion and $2.3 billion, mostly in the first quarter of 2023, related to the layoffs of 12,000 employees.

Weeks after that, Alphabet posted mixed results for the fourth quarter and year-end, that reflected the decline in advertising spending.

At the same time the firm announced that it also expected to incur costs of about $500 million related to reduced office space in Q1, and warned that other real-estate charges are possible going forward.

In light of this, CEO Sundar Pichai defended the new desk-sharing policy for cloud staff, describing some of the company’s offices as practically empty and reminding staffers that real estate is pricey.

The cloud division makes up roughly a quarter of the company’s overall workforce.

Empty offices

“To me it’s obvious that they are trying to be efficient and save money but at the same time also utilise resources,” Pichai was quoted as saying during the company-wide meeting last week, according to audio obtained by CNBC.

“There are people, by the way, who routinely complain that they come in and there are big swaths of empty desks and it feels like it’s a ghost town – it’s just not a nice experience.”

Pichai’s comments follow a CNBC report last month about Google’s plan to ask employees and partners to share desks at the division’s five largest locations, which include New York and San Francisco.

Pichai also reportedly indicated there are many people coming to the office “only two days a week,” which he said makes for an inefficient use of current space.

“We should be good stewards of financial resources,” Pichai reportedly said. “We have expensive real estate. And if they’re only utilised 30 percent of the time, we have to be careful in how we think about it.”

Heavy investments

To some Pichai’s statement about real estate being expensive may raise a few eyebrows, considering Alphabet invested heavily acquiring more office space – even during the Covid-19 pandemic, when most of its offices were empty anyway due to governments around the world ordering people to work at home.

Alphabet’s heavy spending on real estate during the Coronavirus pandemic included the following:

• In September 2020 Google sought to lease an additional 70,000 sq ft in office buildings in London, after it had agreed to extend its lease at the Central Saint Giles site near Tottenham Court Road, for a further decade.

• In March 2021 Google really cemented its real-estate intentions when it pledged to spend $7 billion on office space and data centres across the United States, with $250m set aside for New York City.
• In May 2021 Google announced it would open a New York retail store in the Chelsea neighbourhood, to physically showcase its hardware products.

• In September 2021 Google purchased an office building (St John’s Terminal Building) in the Hudson Square neighbourhood of Manhattan for $2.1 billion.

• In April 2022 confirmed it will spend $9.5 billion across its US offices and data centres during 2022. That was an increase from the $7 billion Google said in 2021 it would spend in the US.