On Tuesday, Alphabet (Google) CEO Sundar Pichai sent a memo to Google employees to let them know that the company would slow its hiring for the balance of the year and take other cost-cutting measures in response to worsening economic conditions. The memo, obtained by The Verge, is a master class in leadership and emotional intelligence and it teaches a lesson every CEO should take to heart.
Needless to say, Google is not the only tech company currently fearing the effects of inflation and a possible recession. Twitter and Netflix, among others, have announced layoffs, and numerous other companies have said that they are freezing or slowing hiring. But only Pichai seems to see the current market uncertainty as an opportunity to focus on what's most important, and inspire employees in the process. The memo he sent should be a model for every leader facing uncertain times like these. (You can find the full memo at the end of this piece.)
To begin with, Pichai starts the memo by thanking Google employees. Noting that 2022 is half over, he writes, "It's the right opportunity to thank everyone for the great work so far this year, and to share how my Leads and I are thinking about H2." Of course, thanking employees for all their great work is pretty much boilerplate for CEOs these days. Still, the fact that Pichai puts it right at the top of his memo makes it seem slightly more sincere.
Pichai then acknowledges that Google leadership is concerned about the same economic headwinds that are affecting the rest of the economy. Noting that Google has already hired about 10,000 people so far in 2022, he explains that the company will slow that trend for the rest of the year, focusing its hiring on what he terms critical roles such as engineering and technical. And there's more bad news. Noting that Googlers will need to work with "sharper focus" and "more hunger" than in better economic times, he warns that the company will need to streamline and consolidate some initiatives, and pause others altogether.
Along the way, he makes a point that I would certainly find inspiring if I heard it from my employer.
Something I cherish about our culture is that we've never viewed these types of challenges as obstacles. Instead, we've seen them as opportunities to deepen our focus and invest for the long term.
A few paragraphs later, he manages to express the same idea in three powerful words: "Scarcity breeds clarity."
Scarcity breeds clarity. These are frustrating, dispiriting times, and no one could reasonably argue that a seemingly endless pandemic, worsening climate change, war in Europe, record inflation, and deadly political polarization are what we wanted to happen. At the same time, Pichai is making a real point. When times are good, we can try everything. We can follow wild ideas and flights of fancy and all of that is wonderful. But harder times force us to make decisions about what really matters. This is true for us both as business leaders and as human beings, which is one reason so many people abandoned work entirely in the Great Resignation. Hard as it is to live through tough times, this process of winnowing away what we care less about and focusing on what we care most about has value too.
Which brings me to the close of Pichai's memo. Because scarcity breeds clarity, it "drives focus and creativity that ultimately leads to better products that help people all over the world," he writes. "That's the opportunity in front of us today, and I'm excited for us to rise to the moment again." And just like that, the unhappy news that Google is facing economic uncertainty and must hire fewer people than planned is transformed into a call to action meant to inspire employees to greater innovation.
There's a growing audience of Inc.com readers who receive a daily text from me with a self-care or motivational micro-challenge or tip. Often they text me back and we wind up in a conversation. (Interested in joining? Here's more information and an invitation to an extended free trial.) Many are entrepreneurs or business leaders, and they tell me how important it is to make the people who work for you feel inspired, especially in difficult times. Sundar Pichai's memo is an example every leader can learn from.
Here is the full text:
Hard to believe we're already through the first half of 2022. It's the right opportunity to thank everyone for the great work so far this year, and to share how my Leads and I are thinking about H2.
The uncertain global economic outlook has been top of mind. Like all companies, we're not immune to economic headwinds. Something I cherish about our culture is that we've never viewed these types of challenges as obstacles. Instead, we've seen them as opportunities to deepen our focus and invest for the long term.
In these moments, I turn to our mission: to organize the world's information and make it universally accessible and useful. It's what inspired me to join the company 18 years ago, and what makes me so optimistic about the impact we are able to have on the world. Knowledge and computing are how we drive our mission forward. That's the lens we use to decide where to invest -- whether it's in areas like Search, Cloud, YouTube, Platforms and Hardware, the teams that support them, or in the AI that enables more helpful products and services.
We help people and society when we focus on what we do best, and do it really well. The investments we've made in the first half of the year reflect this vision. In Q2 alone, we added approximately 10,000 Googlers, and have a strong number of commitments for Q3 start dates which reflects, in part, the seasonal college recruiting calendar. These are extraordinary numbers, and they show our excitement about long-term opportunities, even in uncertain times.
Because of the hiring progress achieved so far this year, we'll be slowing the pace of hiring for the rest of the year, while still supporting our most important opportunities. For the balance of 2022 and 2023, we'll focus our hiring on engineering, technical and other critical roles, and make sure the great talent we do hire is aligned with our long-term priorities.
Moving forward, we need to be more entrepreneurial, working with greater urgency, sharper focus, and more hunger than we've shown on sunnier days. In some cases, that means consolidating where investments overlap and streamlining processes. In other cases, that means pausing development and re-deploying resources to higher priority areas. Making the company more efficient is up to all of us -- we'll be creating more ways for you all to engage and share ideas to help, so stay tuned.
Scarcity breeds clarity -- this is something we have been saying since the earliest days of Google. It's what drives focus and creativity that ultimately leads to better products that help people all over the world. That's the opportunity in front of us today, and I'm excited for us to rise to the moment again.