Google CEO tells employees productivity and focus must improve, launches 'Simplicity Sprint' to gather employee feedback on efficiency

Google is launching a new effort called "Simplicity Sprint" in an effort to improve efficiency and improve employee focus during an uncertain economic environment.

The Alphabet company had its regular all-hands last Wednesday, and the tone was somewhat urgent as employees expressed concern over layoffs and CEO Sundar Pichai asked employees for input, according to attendees and related internal documentation viewed by CNBC. Google’s productivity as a company isn’t where it needs to be even with the headcount it has, Google’s CEO Sundar Pichai told employees in the meeting.

“I wanted to give some additional context following our earnings results, and ask for your help as well,” Pichai opened, referring to the company's Q2 earnings report on Tuesday. "It’s clear we are facing a challenging macro environment with more uncertainty ahead."

He added, "There are real concerns that our productivity as a whole is not where it needs to be for the headcount we have." He asked employees to help "create a culture that is more mission-focused, more focused on our products, more customer focused. We should think about how we can minimize distractions and really raise the bar on both product excellence and productivity.”

It comes after the company reported its second consecutive quarter of weaker-than-expected earnings and revenue on Tuesday. Revenue growth slowed to 13% in the quarter from 62% a year earlier, when the company was benefiting from the post-pandemic reopening and consumer spending was on the rise. CFO Ruth Porat said she expected some of the challenges to continue in the near-term but the company doesn't give formal guidance.

It also comes after Pichai recently announced that it would slow the pace of hiring and investments through 2023, asking employees to work “with greater urgency” and “more hunger” than shown “on sunnier days."

“I would love to get all your help,” Pichai said in Wednesday's all-hands meeting, speaking to its more than 170,000 full-time employees.

To that end, Pichai introduced a "Simplicity Sprint" initiative to crowdsource ideas for quicker product development. "Sprint" is a term often used in software development and by tech startups to denote short, focused pushes toward a common goal.

Pichai said the company is opening the floor for employees to share their ideas through August 15th through an internal survey that asks if management can reach out if they have follow-up questions.

It’s an attempt for the company to “get better results faster," Pichai said during the meeting. The survey, which was viewed by CNBC, shows it may also be used to cut back in certain areas.

Questions in the survey include “What would help you work with greater clarity and efficiency to serve our users and customers? Where should we remove speed bumps to get to better results faster? How do we eliminate waste and stay entrepreneurial and focused as we grow?”

The request also comes as the company tries to ease tensions between employees and executives after an annual “Googlegeist” survey showed staffers gave the company particularly poor marks on pay, promotions and execution.

Highlighting a 7% dip in views about Google’s execution, executive Prabhakar Raghavan at the time wrote “that means we need to bring more attention to busting bureaucracy." Raghavan is among the most important and influential execs at the company, overseeing search, ads, mapping, and other areas.

In May, the company announced it would overhaul its performance evaluation process that will result in increased salaries while hoping to reduce the bureaucracy around compensation and raises.

In Wednesday's all-hands meeting, executives addressed employees concern about potential layoffs. One of the top-rated questions was “In light of Sundar’s statement that sharpening Google’s focus ‘means consolidating where investments overlap and streamlining processes,’ should we expect layoffs?”

Pichai handed the question off to Google’s chief people officer, Fiona Cicconi.

While Cicconi said the company is still hiring and doesn't have plans for layoffs right now, she didn’t rule it out.

“We’re asking teams to be more focused and efficient and we’re working out what that means as a company as well. Even though we can’t be sure of the economy in the future, we're not currently looking to reduce Google's overall workforce."

She also said, “I really get that there is some anxiety around this based on what we’re hearing from other companies and what they’re doing and as Sundar mentioned, we’re still hiring for critical roles,” Cicconi said. She asked employees to remember that it’s still the biggest hiring year in the company’s history.

In the second quarter, Alphabet said its headcount rose 21% to 174,014 full-time employees from 144,056 the year prior. However, the company said last month it will slow the pace of hiring and investments through 2023, and CEO Sundar Pichai told employees in a memo, "we're not immune to economic headwinds."

Pichai noted the broader economic headwinds multiple times. “If you’re looking to what's happening externally — I’m sure you’re all reading the news— the people in businesses who uses Google products are facing their own challenges right now.”