First of all, the stock is performing fantastically
and, contrary to that blog post, I think that Google's R&D spending is a great thing
, and I bet that it will pay off in the long term. If it signifies something wrong with the company, it's the severe internal inequality in which Real Googlers get to work on whatever they want while an underclass of SWE 2-3 and Sr. SWEs gets stuck on the junk work. However, I think it's better for the world to have a Google that does some R&D than for it to have a Google that does almost none, or one that (like Apple) does a lot of R&D but shares little with the open-source world. So I have to give Google props on its R&D spending, and I'm sure that it will find ways to monetize some of its work. It's just time to man up and implement open allocation, is all. Don't get me wrong: Google will do just fine, as a business, if it sticks with its closed-allocation regime, but it will have forever lost any right to call itself a cultural leader (and it may already be too late for that).
So... no, I don't think that a layoff is inevitable in the short term.
In the long term? Businesses can't expand forever... but that's not a knock against Google. In the long term, layoffs probably are "inevitable"... but, in the long term, we're all dead.
As for some depressing news, my bet is that a Google layoff, should one occur, won't be announced.
One of the sleazy tech-company tricks that causes well-adjusted people to hate most of them so much is the tendency to dress business-oriented layoffs as performance-based firings, preserving the company's reputation at the expense of its employees. It will be dressed up. dishonestly, as a "low performer initiative"
-- in other words, blaming the layoff on employees rather than management or economic conditions.
There are rumors that Google did some of that in 2009, and that sort of maneuver is exactly what stack-ranking (and that's what "Perf" is) is for: disguising business-based layoffs as performance-based firings. Those stupid numerical scores (which are typically the result of management-level horse-trading rather than anything relatable to "performance") are there to make it a SQL query: need to cut 8%? Just run the query. Changed your mind and want to cut 10%? Edit the query and go again.
As for my argument that stack-ranking (which invariably results in firing, because there's nothing else to do with people who end up on the bottom, whether they belong there or not) is a dishonest layoff, note that it usually follows the same pattern that an actual layoff would have. For example, if there's a company-wide 10% cut but one business unit is underperforming (and that's rarely the fault of the grunts) it will see 30-40% of its people let go as "underperformers", and almost certainly they weren't all bad people. Just as in a layoff, good people are let go because they were in the wrong place. The difference is that when it's an honest layoff, the company admits that sometimes good people are let go and pays severance to the people affected, and the layoff is usually announced so their reputations aren't harmed.
With the sleazy stack-ranking approach and the PIPs and internal mobility blocks, it's made to look like the departing employees were at fault. And tech companies wonder why everyone hates them...
By the way, stack-ranking is actually the absolute worst way to do a layoff.
Employee expenses are a mere symptom of what really brings a company to the point of needing to lay people off, which is too much complexity
. A "low performer initiative" allows a company to cut people
(and salary expenses) without trimming internal complexity
, because (according to corporate fiction) it's getting rid of that 8% who weren't worth much anyway. The problem is that (a) good people do get tossed out, so there is a loss of force, (b) stack ranking incents political behavior which increases complexity rather than cutting it, and (c) with people rendered insecure by the "low performer initiative"/layoff, they defend turf and no one's willing to have conversations that might reduce complexity.
Ultimately, these "low performer initiatives" do more harm than good. Perhaps a third to half of the people tossed out were legitimately deadwood, but many of them were good people who were in the wrong place at the wrong time (and many permanent underperformers will evade "low performer initiatives" forever because they're good at politics). This means that the company ends up trying to do more with less and that is a recipe for disaster.
To make a layoff work, you need to be planning to do less with less (but selectively on the "less", usually by retreating to core competencies, so that your balance sheet is better.)Around 10 to 12 percent, a company can no longer credibly run a rank-and-yank, and an announced layoff is the only way to go.
The probability of Google being forced to cut that many people within the next 5 years, however, is quite low. I just don't see Google ending up in such dire financial straits that it would have to cut 10+ percent at the same time. Maybe I'm being uncharitable to Google, but my suspicion is that, if Google wanted to get rid of 20% of its people, it would do the sleazy-tech-company thing and use the dishonest silent layoffs (sorry, I mean "low performer initiatives") to the tune of 4-5% per "Perf Cycle" (6 months) for the next five cycles.
While I won't claim (although I believe it is true) that Google has necessarily used its performance-review system to justify dishonest layoffs, I will note that Google's numerical calibration scores follow a forced curve
. A rating below 3.0 (typically assigned to 3-4% of the workforce) doesn't necessarily mean you'll be fired right away, but it basically rapes your reputational shit for breakfast, and the stigma lasts for years. You can't transfer with a 2.9 on you, even if it's three years old. You'll never be promoted, either, and whether you get PIP'd and fired or just linger in career limbo till you quit depends on whether your manager feels like going through the muck of a PIP. And finally, for the important point, the percentage of people who "must" get sub-3.0 scores fluctuates-- from as low as 0.25 to as high as 5 percent per quarter-- according to economic conditions and the performance of the company.
So if that's not a dishonest layoff, then I don't know what is. But is Google going to throw out a 10+ percent news-making layoff? I highly doubt it.See question on Quora