In this economy, technology has been cutting jobs at a breathtaking pace – and a new system of performance reviews at Google is evoking a similar spirit.
While the tech giant has avoided layoffs so far this year, unlike Meta, Twitter and Amazon, it has reportedly introduced a new way to assess employee performance, according to Insider and The Information.
In May, Google announced a new way to rate its employees’ performance, according to The Information. It’s called GRAD, which stands for “Googler Reviews and Development.”
The structure requires managers to categorize a larger percentage of their teams as bad apples, Insider reported, according to internal documents. Previously it was 2%.
Now that is 6%.
Parent company Alphabet, of Google and YouTube, clocked in at 186,779 employees in its most recent earnings report. With the new percentages, more than 10,000 people could receive a label as low performers.
Related: The CEO of Google asks employees 3 simple questions to increase productivity
Like many companies in its industry, the pandemic acted as a sort of sugar high for the industry, driving breakneck hiring. Google added more than 40,000 employees between March 2020 and March 2022.
And investors (one of those types previously called for layoffs at Meta, among others – which laid off 11,000 people in early November) have called on Alphabet to lay off people, Insider noted.
Sir Christopher Hohn of TCI, a London-based hedge fund, which is a major investor in Google, wrote to Alphabet and said: “The company has too many employees and the cost per employee is too high.”
“Management must take aggressive action,” the letter added.
Under Google’s new performance rating system, underperforming now also means you’re in the bottom two categories, not just one, Insider noted. The penultimate category is “moderate impact”, meaning that the person was “not consistent with the expected level/standards” in their position.
If a Google executive wants to put you in one of the bottom two, they’ll have to meet you in a “support check-in,” which has increased recently. Managers now also have minimum numbers of these to run.
“Performance plans are the next step if people don’t respond to the check-ins,” a source told the outlet.
Google told Entrepreneur via email: “Earlier this year, we launched Googler Reviews and Development (GRAD) to help employees develop, coach, learn and career progress throughout the year. The new system helps set clear expectations and regularly review employees provide feedback on their performance.
It is unclear whether this could lead to layoffs of underperforming employees.
This year, Google reportedly quietly cut people by removing certain projects. In 2008, during the Great Recession, Google quietly cut staff costs by cutting the number of independent contractors.