March 8, 2023: The CEO, Sundar Pichai, has defended the cloud unit’s recent desk-sharing policy for workers, representing some of the company’s offices as empty and reminding staffers that real estate is costlier.

“To me, it’s okay that they are trying to be efficient and keep the money but at the same time also utilize help,” Pichai stated in a firm meeting last week, according to audio obtained.

“There are people, who routinely complain that they are arriving in, and there are big swaths of cleared desks, and it feels like it’s a ghost town. It’s just not a cool experience,” He further stated.

Pichai’s comments follow a report in the previous month about Google’s idea to ask cloud employees and partners to share desks at the division’s five most significant locations, which include New York and San Francisco. The organization calls the downsizing effort Cloud Office Evolution (CLOE).

On Alphabet’s fourth-quarter revenue call in February, executives said they anticipate Google to incur costs of nearly $500 million in the current period related to reduced global office space. The company reckons with slowing revenue increase and ongoing recession concerns.

Pichai indicated that many people are coming to the office “only two days a week,” which causes inefficient use of the current space.

“We should be good stewards of fiscal resources,” Pichai said. “We have expensive real estate. And if they’re utilized 30% of the time, we have to be careful in the way think about it.”

At the same all-hands meeting, Anas Osman, Google Cloud’s strategy and operations vice president, stated about one-third of employees come into the offices at least four days a week, which cited data from the group’s pilot to returning to physical locations.

Osman said employees were allowed to have a dedicated or shared desk as part of the pilot.

“Those one-to-one desks were utilized roughly 35% of the time at four days or more,” Osman stated. “We think this is a good balance of finding efficiencies and creating a better experience.”

In some ways, sharing also led to more productivity, he said.

“The data from the pilot showing that Googlers reported significantly better collaboration when they had assigned days in the office, even if that was in a rotational bar and a shared desk,” Osman said.

Pichai said the recent policy is just for cloud employees and added that the company is “giving teams the freedom to experiment.” The cloud division is making a quarter of the firm’s workforce.