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Google to cut some of its perks to cut costs amid AI race


Google, famous for its free sushi lunches and company-provided massages, is cutting some of its perks as the tech giant scrambles to trim costs and reorient itself to focus more on artificial intelligence.

The company will close some of the “microkitchens” that populate its many offices and provide free snacks, cereal, espresso and seltzer water, according to an email sent to employees by Chief Financial Officer Ruth Porat on Friday that was obtained by The Washington Post. Spending on equipment such as personal laptops will be cut too.

The mass layoffs that rocked the company earlier this year are still being “worked through in some countries,” Porat said in the email.

The changes are part of a major shift at Google, which enacted its first large-scale layoffs in January by firing 12,000 people, shocking employees who had assumed the company was safe from cuts that have rocked the tech industry over the past six months. Even among high-paying tech companies, Google became famous for its free perks, including laundry, massages, meals and workout facilities. The perks, high salaries and recurring stock grants gave the company a reputation as the cushiest employer in Silicon Valley. During the pandemic, some Google workers complained that the company didn’t deliver food to their homes.

But a sell-off in tech stocks and concerns about a recession have ended the golden days for tech workers, and Google has joined its competitors in firing thousands of workers, cutting back on expansion projects and ending perks that employees long took for granted.

“We’re making some practical changes to help us remain responsible stewards of our resources while continuing to offer industry-leading perks, benefits and amenities,” spokesman Chris Pappas said.

The cuts come as Google scrambles to stay apace with Microsoft and a growing roster of well-funded start-ups that are launching new AI products that many in the industry say will change the way people interact with computers and usher in a new era of tech competition and innovation.

“This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward — particularly in AI,” Porat said. Google is also moving teams to focus on “higher priority work,” keeping the pace of new hiring lower than in past years and cutting down spending on software tools, equipment and consultants, she said.

Google has spent billions on AI over the past decade, hiring many of the world’s top researchers, but was caught flat-footed when OpenAI, a much smaller firm, began putting out AI tools like image generators and chatbots that spurred a flurry of excitement from everyday users, tech workers and Wall Street.

Google is still at the center of the AI race, though, and its massive data centers filled with computer servers give it an advantage in running the hugely energy-intensive computer programs necessary to train cutting-edge AI algorithms. Much of the company’s focus right now is on finding ways to more efficiently use those computers to save time and energy, Porat said.

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