Why Google Is Delaying Portion of Employees' Year-End Bonuses

Google is deferring a portion of its employees' year-end bonuses as part of a transition to a new performance management system, the search engine giant said on Thursday.

The company will pay 80 percent advance bonus to eligible employees initially and the remainder in later months, a spokesperson told Reuters, adding that the move was communicated to staff last year.

The development comes amid tech companies' attempts to limit spending amid a broader slowdown in demand and deteriorating economic conditions.

Alphabet has so far announced cuts impacting over 200 employees in its health sciences division even as its megacap peers Amazon.com, Meta Platforms and Microsoft have let go thousands of employees.

The advance bonus will be paid in January and the remaining 20 percent in March or April, helping Google spread out costs to the next quarter, according to CNBC, which first reported the story. All bonuses next year onwards will be paid in March, the report added.

Google typically paid full bonuses in the first month of the year.

Last week, Google promoted the head of its international cloud businesses, Adaire Fox-Martin, to take on a top sales role as part of an operating model rejig. The head of Google Cloud unit in the Americas, Kirsten Kliphouse, left the company, a spokesperson said at the time.

Fox-Martin's appointment aims at "unifying global go-to-market organization," the company said and the role would focus on all global sales as well as service and support. The Information had previously reported Kliphouse's departure.

The shakeup came as growth in the cloud software and services industry slowed as clients looked to trim costs and optimise their expenditure on cloud services.

The company is also under pressure amid disappointing ad sales, with advertisers cutting back on their spending in the face of an economic slowdown.

© Thomson Reuters 2023