Slope of Hope Blog Posts

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The Spoiled Brats at Google

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I wrote a post recently about Google's desperate attempt to cling to a couple of Vice Presidents that were going to leave for Twitter by throwing them $50 million and $100 million in exchange for sticking around. My belief was that this was a mistake, to say the least, and it would poison the culture.

Google is, I recognize, a wildly successful company with lots of very, very smart people. I'm not sure I would have the brainpower to get a job there (at least a job I'd want), and this post is no reflection on the skills or brainpower of Googlers.

It is, however, a criticism of where Google finds itself culturally. It is a company with over 26,000 individuals who have been given just about all the goodies a rich Silicon Valley firm could offer. Free gourmet meals; free massages; free snacks; gorgeous corporate campuses; cash bonuses in exchange for buying electric vehicles; free haircuts. The list goes on and on.

I would also remind you that Google repriced all underwater options for its employees early in 2009 when the stock was at a nadir. This was a total giveaway to employees and flew in the face of the entire logic of incentive options. Where's the incentive if the strike price is dropped by hundreds of dollars just because the corporation doesn't like the market's assessment of its value?

A few months ago, faced with an increasingly robust hiring environment for smart engineers, Google granted an across-the-board 10% salary boost to all non-executives. It's not that Google as an organization did anything particularly marvelous that compelled the firm to reward its employees. It simply got scared of a brain drain, so it boosted its employee expense by 10% at a stroke.

Far more insidious is the Everyone Deserves To Be Rich culture that has saturated the company and the Valley at large. The general belief is that (a) if you can code; (b) if you are sharp enough to have been hired by Google in the first place, then you deserve to be a millionaire (perhaps many, many times over). You can imagine how it feels for the thousands upon thousands of engineers whose stock options aren't work any particularly large amount to watch colleagues flit off to Zynga, Groupon, Twitter, Facebook, and other hotter, smaller firms and find their fortune. Google is becoming like Microsoft – – a large, steady cash cow whose best days are far behind it.

Google will keep making billions of dollars in profits for many years to come, but in my opinion, they have burdened themselves with a huge employee base that expects to be pampered at great expense, irrespective of their contributions to the company. The best and brightest will leave for greener pastures, and the majority that remain will suckle at the corporate teat for as long as they are permitted.

I imagine a day, not many years from now, when Google will be forced to fire a large number of people, and that will poison the culture even further. The top line is healthy enough right now for them to indulge Googlers around the world, but when business contracts, margins are going to get crushed, and the company is going to discover it has a lot of fat that it needs to cut. Look at Yahoo over the past couple of years to get a sneak preview of what that's going to look like. It won't be pretty.