Date
22 January 2017
Google's Nest brand of interconnected devices is being given room to grow but its struggling Google+ social media division has slowed hiring. Photo: techwhack
Google's Nest brand of interconnected devices is being given room to grow but its struggling Google+ social media division has slowed hiring. Photo: techwhack

Google reins in aggressive hiring amid slowing growth

Google is curbing hiring and looking for more ways to cut cost amid slowing growth and shrinking margins.

Chief financial officer Ruth Porat, who joined the company in May, is leading the effort, according to the Wall Street Journal which cited recruiters, venture capitalists and others familiar with the matter.

Porat has undertaken an internal audit of costs, revenue and accounting systems, looking to improve efficiency in the sprawling company built around the world’s biggest search engine.

Google will report second-quarter financial results on Thursday in which it is expected to give an update of its cost-cutting plan.

Revenue grew 19 percent in 2014, down from 21 percent in 2013, 22 percent in 2012 and 29 percent in 2011.

By contrast, operating expenses grew 31 percent last year, with spending on research and development up 38 percent.

The company added 1,819 employees in the first quarter, bringing the headcount to 55,419, the smallest increase since the final quarter of 2013.

Last year, Google hired an average of 2,435 employees per quarter.

Since late last year, many Google teams have had to submit plans describing how additional employees will produce specific business objectives, such as increased revenue or more users.

It capped hiring at the struggling Google+ social-media division last year while giving the Nest connected-home unit more room to grow, according to people familiar with the changes.

Ali Behnam of technology recruitment firm Riviera Partners said fewer job candidates are receiving offers from Google and sees the company involved in fewer competitive hiring situations than in years past.

“They are larger and they have to watch their costs more,” he said. The company is still aggressive about retaining employees, often offering more equity, he said.

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