Google is delaying a portion of employee bonus checks

Technology

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Google CEO Sundar Pichai speaks at a panel at the CEO Summit of the Americas hosted by the U.S. Chamber of Commerce on June 09, 2022 in Los Angeles, California.
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Google executives are deferring a portion of employees’ year-end bonus checks, according to documents viewed by CNBC, as the company moves toward permanently pushing back payouts.

In past years, employees received their full bonuses in January. However, Google will pay qualifying full-time employees 80% of their bonus checks this month and the remaining 20% in March or April, the documents say.

Google described the January payout as an “advance” in correspondence to employees. Leadership said it will be a one-time change due to “transition” of its employee-evaluation system and the altered timing for future bonuses.

“After 2023, full bonuses will be paid in March,” the company said in the memo.

Following publication of this story, a Google spokesperson told CNBC in an email, “This one-time 80% bonus advance was extensively communicated to employees in May 2022 and in subsequent communications since, as part of the transition to our new performance management timeline.”

The delayed payment comes as Google CEO Sundar Pichai seeks to reel in costs while still avoiding mass layoffs. Unlike large tech peers Meta, Microsoft and Amazon, Google parent Alphabet has thus far skirted significant job cuts and focused instead on eliminating lagging products and groups. Last week, Alphabet’s Verily health sciences unit said it will cut headcount by 15%, accounting for about 240 lost jobs, and the company also reduced staff in its robotics unit Intrinsic.

In the latter part of 2022, Alphabet canceled the next generation of its Google Pixelbook laptop, slashed funding to its Area 120 in-house incubator and said it would be shuttering its digital gaming service Stadia. Pichai said in September he wants to make the company 20% more efficient.

Meanwhile, Google has been overhauling its performance ratings system. The company recently released new details, showing a larger number of employees will more easily fall into lower-rated categories, CNBC reported last month. Employees said they feared it could be used as a way to reduce headcount without conducting layoffs.

Internal Google employee memes take on company’s bonus check deferrals.

Staffers also expressed concerns with the latest changes to bonus payments. Some told CNBC they weren’t aware of the partial deferment, and said they received little help internally as they tried to search for answers.

One graphic on Memegen, an employee meme generator, showed a split screen of Prince Harry and Meghan Markle, with a quote from Markle that’s edited to say, “Harry is adjusting great to Google” next to an image of a disturbed-looking Prince Harry with the text “Where the hell did 20% of my bonus go?” 

Sources also described a meme with the text reading “Got my BONU,” referring to the realization that they didn’t receive their whole bonus as expected.

Alphabet is scheduled to report fourth-quarter earnings on Feb. 2. Analysts expect revenue growth of less than 2% from a year earlier, according to Refinitiv, while earnings per share is expected to drop to $1.18 from $1.53. The stock has dropped 31% in the past year.

Correction: A prior version of this story inaccurately tied the timing of bonus payments to quarterly costs. The sentence has been removed.

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