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Google CEO Sundar Pichai tells staff 'not to equate money with fun' amid company cost-cutting

Google CEO Sundar Pichai warned employees that

Google’s CEO has told his staff “not to equate money with fun” as he addresses cost-cutting measures that would see “modest” Christmas parties this year at the tech giant.

Sundar Pichai told employees angry over recent cuts in travel and entertainment budgets, as well as potential layoffs, that the company was bracing for tough economic times, according to leaked audio of a company meeting obtained by CNBC.

“We shouldn’t always equate fun with money,” Pichai, who earns an estimated salary of $6.3 million a year and is worth an estimated $1.31 billion, told employees upset about losing their benefits.

“We are committed to taking care of our employees,” he added. “I think we’re going through a tough time macroeconomically, and I think it’s important that as a company we align and work together.”

The billionaire CEO added that hiring and investment will slow at Google, which comes just a week after the company canceled its next-generation laptop and reshuffled 50 employees following major cuts to its incubator program.

Google CEO Sundar Pichai warned employees “not to equate money with fun” as he said the company would commit to saving money in tough economic times.

Google’s finance chief also urged employees to prepare for smaller Christmas parties this year, telling employees to “try not to overdo it.” In 2014, the company’s Christmas party included a Cirque du Soleil performance at the Computer History Museum in Mountain View, California.

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That same year, the company held another Indiana Jones-themed Christmas party (above) at The Mayan nightclub in Los Angeles.

That same year, the company held another Indiana Jones-themed Christmas party (above) at The Mayan nightclub in Los Angeles.

To save money, Kristine Reinke, Google’s chief financial officer, told employees to temper their expectations for the upcoming holiday season.

“We definitely want people to still have fun,” he said. “We know that Christmas parties are coming up, New Year’s Eve celebrations are coming up, we still want people to do that.

“But we’re just asking them to keep it small, to keep it casual, to try not to overdo it.”

In 2018, Google held its ‘Out of this World’ holiday party, which featured catering for 6,000 people, mirror ball robots dancing, and Star Wars stormtroopers doing ballet.

Natasha Miller, whose company hosted the event for Google, told Business Insider that holiday parties hosted by Silicon Valley tech companies can range from $50,000 to $1 million.

Pichai had been asked by Google staff why the company was ’employing for hire’ by cutting its travel and entertainment budgets when ‘Google has record profits and huge cash reserves’.

Google’s parent company Alphabet posted $69.69 billion in revenue at the end of the fiscal second quarter this June, up more than 12 percent from a year ago.

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However, fears of an upcoming recession triggered by rising federal interest rates have put big tech companies like Alphabet and Meta on high alert, with the former seeing a more than 13 percent drop in the value of the shares during the last month.

Pichai said the company needed to reassess its spending, but he resented the idea that it was engaging in “aggressive cost saving.”

Despite posting revenue growth in June, Alphabet, Google's parent company, has continued to see its shares slide amid fears of a recession.

Despite posting revenue growth in June, Alphabet, Google’s parent company, has continued to see its shares slide amid fears of a recession.

During the meeting, Pichai also downplayed or completely ignored questions about his own income and expenses.

With the company’s travel budget now restricted for major business use, an employee asked about the CEO’s decision to go to New York for his ‘Thank God It’s Friday (TGIF)’ meeting.

“It’s an interesting option for Sundar to be in New York for TGIF the week after employee travel is reduced to the most business-critical,” the employee’s question read. I’m sure Sundar has critical business meetings in New York.

‘I think so. I think she qualified,” Pichai replied.

The CEO then dodged a question that pointed to cost cutting through reduced executive compensation.

Pichai reportedly made $6.3 million last year, while other executives earned a combined salary of more than $28 million. Earlier this year, Google raised its base salary for executives from $650,000 to $1 million.

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In a statement about the meeting, a Google spokesperson said: “Sundar has been talking constantly with the company over the past few months about ways we can be more focused.”

Mark Zuckerberg, 38, is seen September 15 in Los Angeles after learning his wealth is down $71 billion so far this year as his company aims to cut costs by at least 10%.

Mark Zuckerberg, 38, is seen September 15 in Los Angeles after learning his wealth is down $71 billion so far this year as his company aims to cut costs by at least 10%.

The change at Google comes just two days after Facebook parent company Meta announced that it aims to cut expenses by at least 10 percent in the coming months by cutting staff and reorganizing departments.

The social media company has been able to expel several employees by reorganizing their departments and giving the affected employees a 30-day window to apply for other positions at the company.

The process allows the company to reduce the cost of employees and avoid issuing pink slips while evaluating options in the future.

Meta executives recently discussed the need for “ruthless prioritization” within the company and said hiring freezes are necessary, though they avoided using the word “layoffs” at the time.

CEO Mark Zuckerberg’s wealth is tied to Meta stock, and as it is down 58% this year, he has lost $71 billion of his fortune.

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