Google\u2019s\u00a0blowout earnings\u00a0report in April, which sparked the biggest rally in\u00a0Alphabet\u00a0shares since 2015 and pushed its market cap past $2 trillion for the first time,\u00a0tempered fear\u00a0that the company was falling behind in artificial intelligence.<\/p>\n
As executives enthusiastically talked about the results with Google\u2019s employees at an all-hands meeting the following week, it was clear that Wall Street viewed things differently than the company\u2019s workforce.<\/p>\n
\u201cWe\u2019ve noticed a significant\u00a0decline in morale, increased distrust and a disconnect between leadership and the workforce,\u201d one employee wrote in a comment that was read by executives at the meeting. \u201cHow does leadership plan to address these concerns and regain the trust, morale and cohesion that have been foundational to our company\u2019s success?\u201d<\/p>\n
The comment was highly rated on an internal forum.<\/p>\n
\u201cDespite the company\u2019s stellar performance and record earnings, many Googlers have not received meaningful compensation increases\u201d another top-rated employee question read.<\/p>\n
That meeting set the stage for what would be a year of contrasting takes from the company\u2019s vocal workforce. As Google faced some of the most intense pressure its experienced since going public two decades ago, so too did CEO\u00a0Sundar Pichai, who took the helm in 2015.<\/p>\n
Pichai oversaw a steady stream of revenue growth this year in key areas like search ads and cloud. The company rolled out groundbreaking technologies, rounded out its AI strategy despite a slew of embarrassing product incidents and saw its stock price rise more than 40% as of Thursday\u2019s close, ahead of the S&P 500 but trailing rivals Meta and Amazon.<\/p>\n
Over the course of 2024, many staffers questioned Pichai\u2019s vision following product mishaps in the first half of the year as well as internal shake-ups and layoffs, according to conversations with more than a dozen employees, audio recordings and internal correspondence.\u00a0<\/p>\n
As the second half of the year progressed and Google rolled out a number of eye-catching AI products, Pichai\u2019s standing improved, though some skepticism remains, sources told CNBC.<\/p>\n
After the introduction of ChatGPT in late 2022, the tech industry saw an influx of AI products from Microsoft, with its Copilot AI assistant, and Meta, which placed its Meta AI chatbot in the search functions of its apps, as well as from hot startups like OpenAI and Perplexity.<\/p>\n
The popularity of those tools has eaten into Google\u2019s grip on U.S. search. The company\u2019s share of the search advertising market is expected to dip below 50% in 2025, which would be the first time falling below that mark in more than a decade, according to research firm eMarketer.<\/p>\n
Google responded to the pressures from new AI tools with offerings of its own. The company in 2024 rebranded its family of AI models as Gemini and released a number of products that were well received. But in its scramble to play catch-up, the company also released a pair of AI products that initially proved embarrassing.\u00a0<\/p>\n
In February, Google launched Imagen 2, which turned user prompts into AI-generated images. Immediately after it was introduced, the product came under scrutiny for historical inaccuracies discovered by users. Notably, when one user asked it to show a German soldier in 1943, the tool depicted a\u00a0racially diverse set of soldiers\u00a0wearing German military uniforms of the era.\u00a0<\/p>\n
The company\u00a0pulled the feature, and Pichai told employees the company had \u201coffended our users and shown bias,\u201d according to a memo.\u00a0Google said it would take a few weeks to relaunch Imagen 2, but it ended up being six months before it was\u00a0revived\u00a0as Imagen 3 in August.\u00a0<\/p>\n
\u201cWe definitely messed up on the image generation,\u201d Google co-founder Sergey Brin\u00a0told a small crowd\u00a0at a hacker house in March, in a video\u00a0posted to YouTube. \u201cIt was mostly due to just not thorough testing.\u201d\u00a0<\/p>\n
The launch of AI Overview in May caused a similar reaction.\u00a0<\/p>\n
That product showed users AI summaries atop Google\u2019s traditional search results. Pichai hyped the product, calling it the\u00a0biggest change\u00a0to search in 25 years. Once again, users were\u00a0quick to find problems.<\/p>\n
When asked \u201cHow many rocks should I eat each day,\u201d the tool\u00a0said, \u201cAccording to UC Berkeley geologists, people should eat at least one small rock a day.\u201d AI Overview also listed the vitamins and digestive benefits of rocks.<\/p>\n
Google\u00a0responded\u00a0by saying it would add more guardrails to AI Overview for health-related queries but said the mistakes weren\u2019t hallucinations, and were rather just rare edge cases. Search Vice President Liz Reid told employees at\u00a0an all-hands meeting\u00a0in June that AI Overview\u2019s launch shouldn\u2019t discourage them from taking risks.\u00a0<\/p>\n
\u201cWe should act with urgency,\u201d Reid said. \u201cWhen we find new problems, we should do the extensive testing but we won\u2019t always find everything and that just means that we respond.\u201d<\/p>\n
Beyond its AI blunders, Google also saw its greatest regulatory challenges to date in 2024.<\/p>\n
In August, a federal judge\u00a0ruled\u00a0that the company illegally holds a monopoly in the search market. The Justice Department in November asked that Google be\u00a0forced to divest\u00a0its Chrome internet browser unit as a remedy for the ruling<\/p>\n
The DOJ\u2019s request represents the agency\u2019s most aggressive attempt to break up a tech company since its\u00a0antitrust case\u00a0against\u00a0Microsoft, which reached a settlement in 2001.<\/p>\n
The remedies are expected to be decided next summer, and Google has said it will appeal, likely dragging out the situation a couple more years, but the company faces more antitrust hurdles.\u00a0<\/p>\n
In a separate case, the DOJ accused the company of illegally dominating online ad technology. That trial closed in September and awaits a judge ruling. In October, a U.S. judge\u00a0issued\u00a0a permanent injunction that will force\u00a0Google\u00a0to offer alternatives to its Google Play app store for Android phones. After the ruling in October, Google\u00a0won a temporary\u00a0pause on the ruling, meaning it won\u2019t have to open up Android to more app stores yet.<\/p>\n
Amid the external pressure, Google notched some notable victories particularly toward the end of 2024, leading to a more positive sentiment from people within and outside the company.<\/p>\n
Google successfully\u00a0launched\u00a0its most powerful suite of new Gemini models that underpin all of the company\u2019s AI products, including its lightweight model Gemini Flash, which has been popular among developers. YouTube\u2019s combined ad and subscription revenue over the past four quarters surpassed $50 billion.\u00a0<\/p>\n
In the third quarter, Google saw the fastest-growing cloud business across the big tech players, up 35% over last year, with operating margins of 17%. The company has also seen double-digit revenue growth for each of the past four quarters and launched\u00a0Trillium, its powerful sixth generation Tensor Processing Units, or TPUs, which were also found to have powered\u00a0Apple\u2019s\u00a0AI models.\u00a0<\/p>\n
Despite the blunders, AI Overview reached nearly 1 billion monthly users by the end of October. Demand for AI software has also driven consistent growth for the company\u2019s cloud infrastructure. And Google launched an impressive video generation product, Veo 2, this month as well as an updated AI note-taking product, NotebookLM.<\/p>\n
Beyond AI, Google in December announced\u00a0Willow, a chip the company calls its biggest step in the march toward commercially viable quantum computing. The Waymo self-driving car unit was also\u00a0a bright spot, expanding its robotaxi service to three cities and laying the groundwork for even more expansion in 2025. The company has delivered 4 million fully autonomous rides this year, with plans to commercially launch in Austin, Texas, and Atlanta next year.\u00a0\u00a0<\/p>\n
But as Pichai approaches a decade running Google and starts his sixth year as CEO of parent Alphabet, questions remain about his ability to guide the company into the future.<\/p>\n
Internally, employees routinely criticize leadership on the company\u2019s Memegen messaging board, and some have aired their grievances publicly.\u00a0<\/p>\n
\u201cGoogle does not have one single visionary leader,\u201d a Google software engineer wrote in\u00a0a LinkedIn post\u00a0earlier this year that received more than 8,500 reactions. \u201cNot a one. From the C-suite to the SVPs to the VPs, they are all profoundly boring and glassy-eyed.\u201d<\/p>\n
In October, Google announced it would shake up the leadership of its ads and search division.<\/p>\n
The company\u00a0replaced\u00a0longtime search boss Prabhakar Raghavan with Nick Fox, a deputy of Raghavan\u2019s and a career Google employee. Raghavan was given the title of \u201cchief scientist,\u201d but internally, he is now listed as an \u201cIC,\u201d or individual contributor.\u00a0<\/p>\n
Google also shifted the team working on its Gemini AI app to the Google DeepMind division, under AI head Demis Hassabis. Employees praised Pichai\u2019s leadership shuffle, but some complained that the moves should\u2019ve happened sooner.<\/p>\n
Notably, some employees were perturbed when Raghavan addressed employees at an all-hands meeting in April, when he\u00a0urged them to move faster, according to several people who spoke with CNBC.\u00a0Raghavan noted that the staffers working to fix the failed Imagen 2 tool had increased their workloads from 100 hours a week to 120 hours to correct it in a timely manner.<\/p>\n
Pichai has made efforts to get Google back to its nimble startup-like culture.\u00a0<\/p>\n
When addressing employees, Pichai often name-checked co-founders Sergey Brin and\u00a0Larry Page\u00a0to remind them of Google\u2019s scrappy roots. He\u2019s flattened the company, removing 10% of middle management, according to audio of a December all-hands meeting. And in the spring, Pichai greenlit a hackathon, allowing employees to build using Google products that have yet to be announced. Pichai has also personally joined meetings with Google\u2019s Labs team and enabled them to move quickly on products like NotebookLM, one of the company\u2019s hit AI products in 2024.<\/p>\n
After Brin\u2019s hacker house appearance in March, some employees internally joked he should retake the helm, nostalgic for what they perceived as a visionary leader devoid of corporate speak.\u00a0<\/p>\n
Brin co-founded Google with Page in 1998, but he stepped down as president of Alphabet in 2019. Brin, who remains a board member and a principal shareholder with a stake worth more than $140 billion,\u00a0began appearing\u00a0more frequently on campus starting in 2023, as part of an effort to help ramp up Google\u2019s position in the hypercompetitive AI market. Employees, particularly working in AI and DeepMind said they\u2019ve seen Brin walking around the company\u2019s Mountain View, California, headquarters throughout the year and have been able to ask him questions for projects they\u2019re pursuing.<\/p>\n
Despite Brin\u2019s reemergence, several employees told CNBC they\u2019re doubtful he could adequately run what has become an increasingly larger and complex corporation.\u00a0<\/p>\n
Employees said that although Pichai didn\u2019t strike them as particularly visionary or as a wartime leader, it\u2019s hard to find someone better suited for the job, given all the complexities of Alphabet. The key quandary remains: move too early and risk widespread criticism; move too late and risk missing the boat.<\/p>\n
Through the year, morale inside Google wavered. Efforts to cut costs across the company in order to invest more in AI resulted in some teams feeling bifurcated and created yet another challenge for Pichai.<\/p>\n
Within the company\u2019s AI and DeepMind divisions, morale is mostly high, according to employees, boosted by hefty investments. Elsewhere, the vibes have been marred by cost cuts,\u00a0bureaucracy\u00a0and declining trust in leadership, employees said.\u00a0<\/p>\n
DeepMind and AI teams have held off-sites, team-building activities, and have much bigger travel and recruiting budgets, people familiar with the matter said. In the spring, the company moved employees out of an eight-story office on San Francisco\u2019s waterfront Embarcadero street and replaced them with AI and AI adjacent teams.\u00a0<\/strong><\/p>\n A meme posted internally in November summed it up.\u00a0<\/p>\n The meme featured a photo of the cast of \u201cWicked\u201d actors, where one, labeled \u201cexecs\u201d looked longingly at one fellow actor labeled \u201cGemini\u201d while ignoring the other beside her, which was labeled as \u201cusers.\u201d<\/p>\n A Google spokesperson contested the idea that AI workers are receiving favorable treatment and said higher travel and recruiting budgets are not exclusive to AI teams or DeepMind.\u00a0<\/p>\n \u201cMost Googlers, regardless of team, continue to feel positively about our mission and the company\u2019s future, and are proud to work here,\u201d the spokesperson said.\u00a0<\/p>\n A few\u00a0<\/strong>employees say they\u2019re no longer incentivized by the prospects of landing a promotion, which have become harder to achieve, and rather by the hope of avoiding layoffs.\u00a0<\/p>\n Despite slashing 12,000 jobs, or roughly 6% of its workforce, in 2023, Google has continued eliminating roles this year. In her first public statements as Google\u2019s CFO, Anat Ashkenazi, told Wall Street\u00a0in October\u00a0that one of her top priorities would be to drive more \u201ccost efficiencies\u201d across the company in order to invest more in AI.<\/p>\n \u201cI think any organization can always push a little further and I\u2019ll be looking at additional opportunities,\u201d Ashkenazi said.<\/p>\n That month, Google posted a job listing for a \u201cCentral Reorg Support Team Partner.\u201d The responsibilities of that fixed-term contract position would include consulting with local HR teams and noted the need for the support staff\u2019s \u201cability to operate with empathy and diffuse\/de-escalate challenging conversations\/situations.\u201d\u00a0<\/p>\n \u201cHire the smartest people so they can tell us what to do,\u201d one employee wrote on the internal forum in meme-style font atop the images of Brin and Page. \u201cHire a reorg consultant so they can tell us how to layoff the smartest people,\u201d another said.\u00a0<\/p>\n Google ultimately took the job listing down.<\/p>\n Touting its AI technology to clients, Pichai\u2019s leadership team has been aggressively pursuing federal government contracts, which has caused a heightened strain in some areas within the outspoken workforce since the beginning of the year.<\/p>\n Google\u00a0terminated\u00a0more than 50 employees after a series of protests against Project Nimbus, a $1.2 billion joint contract with Amazon that provides the Israeli government and military with cloud computing and AI services. Executives repeatedly said the contract didn\u2019t violate any of the company\u2019s\u00a0\u201cAI principles.\u201d<\/p>\n However,\u00a0documents\u00a0and\u00a0reports\u00a0show the company\u2019s agreement allowed for giving Israel\u00a0AI tools\u00a0that included image categorization, object tracking, as well as\u00a0provisions\u00a0for state-owned weapons manufacturers. Earlier this month, a New York Times\u00a0report found\u00a0that four months prior to signing on to Nimbus, officials at the company worried that signing the deal would harm its reputation and that \u201cGoogle Cloud services could be used for, or linked to, the facilitation of human rights violations.\u201d<\/p>\n In an all-hands meeting in April, a highly rated question asked why employees who did not participate in the protests were also fired, which was\u00a0reported\u00a0and cited in a\u00a0National Labor Relations Board complaint\u00a0from affected employees. Chris Rackow, Google\u2019s security chief, took the stage at the all-hands and rebutted those claims.<\/p>\n \u201cThis was a very clear case of employees disrupting and occupying work spaces, and making other employees feel unsafe,\u201d a Google spokesperson told CNBC, adding that the company \u201ccarefully confirmed\u201d that every person terminated was involved in the protests. \u201cBy any standard, their behavior was completely unacceptable.\u201d<\/p>\n That round of job eliminations underscored Google\u2019s clampdown on internal discussions related to hot-button topics,\u00a0including politics and geopolitical conflicts, which was encouraged by executives several years prior.<\/p>\n One internal meme that got more than 2,000 likes,\u00a0<\/strong>compared Google to Star Wars\u2019 Anakin Skywalker. The meme shows an image of a smiling childhood Skywalker, framed by one of the company\u2019s original, colorful employee badges. The meme progresses Skywalker\u2019s age in two later versions of the badge.\u00a0<\/p>\n The final badge shows Darth Vader working for \u201cGoogle,\u201d spelled out in the font of IBM\u2019s logo.<\/p>\n<\/p>\n Google\u2019s\u00a0blowout earnings\u00a0report in April, which sparked the biggest rally in\u00a0Alphabet\u00a0shares since 2015 and pushed its market cap past $2 trillion for the first time,\u00a0tempered fear\u00a0that the company was falling behind in artificial intelligence. As executives enthusiastically talked about the results with Google\u2019s employees at an all-hands meeting the following week, it was clear that Wall […]<\/p>\n","protected":false},"author":0,"featured_media":13545,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-13544","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=13544"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13544\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/13545"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=13544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=13544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=13544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}