Google to invest $ 7 billion in a bet on the post-pandemic office

Google says it is doubling the office.

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The unit said it would spend $ 7 billion this year to expand its office and data center footprint in the United States, including investing $ 1 billion in its home state of California. The search engine giant said it would hire at least 10,000 new full-time employees over the course of the year in anticipation of a post-pandemic recovery in the US.

The spending commitment follows a slowdown in investment by Google about a year ago, when the magnitude of the Covid-19 crisis was beginning to take shape. Last April, Alphabet and Google CEO Sundar Pichai told staff in a memo that Google would cut hiring amid the pandemic.

Like other big tech companies, Google has thrived over the past year, benefiting from an accelerating shift in online ad spend. Despite that growth, its investment in the United States planned for 2021 is less than pre-pandemic levels; invested an annual average of $ 11 billion in 2018 and 2019.

The company said this year’s investment plan is targeting existing sites but is also creating three new office sites, in Minnesota, Texas and North Carolina, expanding Google’s presence to 19 states. The company said it would add thousands of roles at existing sites in Atlanta, Washington, DC, Chicago and New York, extending a year-long effort to expand its presence beyond Silicon Valley. Alphabet reported more than 135,000 employees worldwide as of last year.

“Meeting in person to collaborate and build a community is central to the culture of Google,” Pichai said in a blog post Thursday. “And it will be an important part of our future.” Google’s announcement comes about a week before Pichai appears before Congress with Facebook CEOs. Inc.

and Twitter Inc.

for a hearing on disinformation on Internet platforms.

Google has more than doubled its number of data centers in the US since 2018, reflecting the increasing volume of digital information generated by individuals and businesses on a daily basis. The company has been investing heavily in its cloud business in recent years as it seeks growth beyond its core ad revenue. Last year it began to break down its cloud unit’s revenue, and reporting sales increased 46% to $ 13.08 billion from 2019. Expenses increased over the same period by 51% to $ 5 billion.

Leading tech companies are embracing remote work amid an exodus of skilled labor from Silicon Valley. WSJ looks at what that could mean for innovation and productivity and what companies are doing to manage the impact.

The expansion of data centers by Google and other tech companies typically creates a large number of construction-related jobs, but requires minimal staffing once they are completed. The facility can be many times the size of a Walmart Supercenter, but employs fewer than 100 people to service the equipment.

Google’s announcement also comes as large companies reconsider their office work after a year in which many employees have been working from home. Google was one of the first large American corporations to formally extend the time period for employees to work remotely, and last summer it decided it would keep staff working from home until at least July of this year. As Covid-19 cases stabilize or decline in many places and vaccinations on the rise, executives are now debating when and how to return to offices.

The search giant now expects employees to return to offices in the fall and plans to allow workers to do so remotely two days a week. The policy differs slightly from other tech companies like Twitter and Facebook, which plan to allow more of their employees to continue working remotely after vaccine distribution has expanded.

Other tech companies have been accelerating investments outside the Bay Area. Having encouraged employees to experiment with working remotely from other locations, many have chosen to make those moves permanent. Austin, Texas, has been a special place for technology jobs.

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Write to Parmy Olson at [email protected] and Tripp Mickle at [email protected]

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