Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum (WEF) annual meeting in Davos on January 22, 2020.


Google CEO Sundar Pichai defended the cloud unit’s new desk-sharing policy for employees, described some of the company’s offices as virtually empty and reminded staff that real estate is expensive.

“To me, it’s clear that they’re trying to be efficient and save money but also use resources,” Pichai said at a company-wide meeting last week, according to audio obtained by CNBC. “There are people, by the way, who routinely complain that they come in and there are large areas of empty desks and it feels like it’s a ghost town — it’s just not a pleasant experience.”

Pichai’s comments follow a CNBC report last month about Google’s plan to ask cloud employees and partners to share desks at the division’s five largest locations, which include New York and San Francisco. The company calls the downsizing effort Cloud Office Evolution, or CLOE.

On Alphabet’s fourth quarter earnings call in early February, executives said they expect Google to incur costs of about $500 million in the current period related to reduced global office space, as the company anticipates slowing revenue growth and ongoing recession concerns.

Pichai indicated that many come to the office “just two days a week,” which he said makes for an inefficient use of current space.

“We should be good stewards of financial resources,” Pichai said. “We have expensive real estate. And if it’s only being used 30% of the time, we have to be careful how we think about it.”

At the same all-hands meeting, Anas Osman, Google Cloud’s director of strategy and operations, said about a third of employees come into offices at least four days a week, citing data from a pilot the group conducted regarding returning to brick-and-mortar locations.

As part of the pilot, Osman said, employees were given the option of having a dedicated or shared desk.

“These 1-to-1 desks were actually used about 35% of the time at four days or more,” Osman said. “We think this is a good balance between how to both find efficiency and create a better experience.”

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

Data from the pilot shows that Googlers reported significantly better collaboration when they had assigned days in the office even in a rotational model and a shared desk, Osman says.

Pichai said the new policy is only for cloud employees for now, adding that the company is “giving teams the freedom to experiment.” The cloud division makes up about a quarter of the company’s total workforce.

During the meeting, Pichai addressed employee concerns regarding the rollout of the desktop sharing policy and how it was communicated to staff. CNBC previously reported that memes began to appear in the internal Memegen system criticizing the messages of the leadership. A popular meme said, “Not all austerity measures need to turn out to sound good to employees.”

In response to questions and comments left by employees, Pichai read one that said, “doublespeak is disrespectful and frustrating” and “bad things happen, no need to make every bad thing sound like a miracle.”

Pichai said in response: “I agree with the sentiment here. The feedback is valid.”

“We should always strive to be as straightforward as possible,” Pichai said. “I think it’s important to understand at our scale, pretty much all communications are public in nature. You’re speaking to the world and there are many, many stakeholders and so sometimes nuance is important and words can have a material impact and I think you sometimes see that reflected in some of the communication.”

A Google spokesperson did not immediately respond to a request for comment.

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