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Google consolidates desks in “real estate efficiency” push

New policy for cloud employees after company announced $500M plan to shed offices

Google's Sundar Pichai, 510 Townsend Street (Getty, STUDIOS Architecture)
Google's Sundar Pichai, 510 Townsend Street (Getty, STUDIOS Architecture)
By
Feb 23, 2023, 11:36 AM

Google announced some employees would have to permanently share desks starting next quarter in the name of “real estate efficiency” as the tech giant makes good on its plan to cut office costs.

An internal memo reviewed by CNBC detailed the changes coming to five of the biggest locations for the Google Cloud business across the country. The biggest change is a plan for cloud employees in five cities — including New York City and San Francisco — to alternate desks on a Monday through Wednesday or Tuesday through Thursday schedule.

The internal FAQ said some of the company’s buildings would be vacated as a result of the musical desk situation. That falls in line with the company’s $500 million plan to shed offices, a plan that hasn’t carried specifics yet.

Unlike some return-to-office or hybrid work plans enacted by major companies, this one isn’t a pilot — it’s a permanent change to how the unprofitable cloud unit will operate. More than a quarter of the company’s full-time workforce is part of the cloud unit, which lost $480 million in the fourth quarter.

Employees will be matched with one another, then proceed to “establish norms with their desk partner.” 

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Employees will be allowed to come in on days when they don’t have their desk, but they will be relegated to “overflow drop-in space,” according to the memo. Workers will also be discouraged from camping out in conference or meeting rooms.

Google referred to the arrangement as “Cloud Office Evolution.” The name drew mockery from some on a company platform, including people who said the company should simply come out and say the arrangement is a cost-cutting measure.

In its fourth-quarter earnings call, Google outline a plan to “optimize” its real estate footprint by incurring $500 million in losses to downsize its office space during the fourth quarter. The company also planned 12,000 layoffs across the globe.

The company has made a number of notable office purchases in recent years, including St. John’s Terminal in Manhattan and the Thompson Center in Chicago. In September, the company tapped Scott Foster to be its new head of real estate following the retirement of David Radcliffe.

— Holden Walter-Warner

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