Google cuts 35% of small team management layers, streamlining hierarchy and emphasizing efficiency

Google has cut 35% of the managers responsible for small teams, as the organization continues to focus on improving efficiency.

On Wednesday, according to a report by CNBC, based on a recording of an all-hands meeting, Google executive and Vice President of People Analytics and Performance Brian Welle said, "Currently, our number of managers has decreased by 35% compared to a year ago, and each manager has fewer direct reports. The progress in this direction is very fast."

During the meeting, Google employees asked Welle and other executives questions about job security, internal barriers, and Google culture, in the context of recent rounds of layoffs, buyouts, and restructuring. Welle stated that this move aims to reduce bureaucracy and operate the company more efficiently. "When we look at the entire management layer (managers, directors, and vice presidents), we want their proportion among the overall employees to become smaller over time."

Insiders indicated that the aforementioned "35% reduction" refers to the decrease in the number of managers overseeing teams of three or fewer.

Google CEO Sundar Pichai also emphasized that the company needs to be more efficient while expanding, so that it does not rely on increasing headcount to solve every issue.

In 2023, Google laid off about 6% of its employees and subsequently implemented cuts in several departments. Anat Ashkenazi, the Chief Financial Officer of Alphabet who joined the company last year, stated in October that cost reductions would be pushed further. Since January of this year, Google has offered buyout options to employees and slowed down hiring, asking employees to accomplish more work with fewer resources.

Regarding the buyout options, attending executives stated that there are "Voluntary Exit Plans (VEP)" available in 10 product areas. This year, these plans apply to employees in the search, marketing, hardware, and human operations teams in the U.S. region.

Google's Chief Human Resources Officer Fiona Cicconi mentioned in a meeting last week that 3%-5% of employees in these teams have accepted the buyout. "This has actually been quite successful. I think we can continue to push forward. One of the main reasons employees choose the buyout is that they want to take a break. Interestingly, many of those choosing VEP are looking for a career break, sometimes to take care of family."

Pichai stated that the company implemented the voluntary buyout after listening to employee feedback, as employees preferred this approach over across-the-board layoffs. "To implement VEP, we did a lot of work, and I’m glad we did. It gives employees autonomy, and I’m also pleased to see it has had good results."

Earlier, CNBC reported that while Google was downsizing, it also delivered impressive financial reports and saw a surge in stock prices, which impacted employee morale. Alphabet's stock price has risen about 10% this year, following a 36% increase in 2024 and a 58% increase the previous year.

In another segment of the meeting, employees asked whether Google would consider a "Recharge" policy similar to Meta's, which allows employees to take a month of paid leave after five years with the company.

Google's Senior Director of Benefits Alexandra Maddison said, "We have many types of leave, especially annual leave, which is meant for rest and recharge." The company will not provide paid sabbatical leave. We are very confident that our current benefits are competitive in the market."

Other executives also joined in comparing the benefits of the two companies. Cicconi said, "By the way, I don't think Meta has a VEP (Voluntary Exit Program)."

Pichai then asked amid laughter from the audience, "Should we bring over all of Meta's policies? Or just pick the few we like? Maybe I should try running the company with all of Meta's policies. Well, maybe not."