[ChuckMcM]

Pretty much spot on of course, anyone who was at Google 'before' can trace the dots to today.

One of the benefits of a generous set of perks is that management can adjust the expense once they get close to the end of the quarter so that the 'numbers come out right.' Google is losing that ability. It makes things like their Q4 'miss' [1] more likely.

It is of course entirely Google's prerogative on how they spend their money. And if you look at their Q4 results [2] they deposited 2.97 billion dollars into the bank in cash based on the work done by their 32,467 employees. That is $91,477 in cash for the 90 days that ended December 31st. Lets say every employee ate 3 gourmet meals a day, at a cost of $15+$25+$50 or $90, and consumed another $25 in snacks so $115 per employee per day. (and those are gonna be some fat employees!) That is 32,467 x $115 x 90 days or $335 million dollars. Or about 11 cents of each dollar they dropped into the bank. The numbers of course reflect the costs that a typical restaurant would charge that was profitable, and $25 a day in snacks? That is probably way beyond what most anyone would eat so these numbers are way over if anything.

But at some point between the original prospectus where Larry and Sergei told potential investors that they were going to spend a lot on perks like this so get used to it; to today, where sometimes elaborate explanations about social consciousness and environmental justice precede the denial of those perks. Someone decided the company's interest was to build a cash pile, not invest in quality of life benefits for the rank and file. Sad really, they are the kind of company that can afford to do it, and now they choose not to. So much for being different.

[1] http://www.nytimes.com/2012/01/20/technology/googles-strong-...

[2] http://investor.google.com/earnings/2011/Q4_google_earnings....

[nostrademons]

Google's Q4 miss had nothing to do with perks. They could eliminate all the perks and it wouldn't have made a dent in stock performance.

The earnings miss was by about $1/share, or $323M. That's about $10K per employee over the quarter. You really think Google spends $10K/employee/quarter on perks? I've heard numbers for the food costs, and you're overestimating by more than an order of magnitude.

I actually think perks today are significantly better than they were when I joined in Jan 2009. Cafes are open on weekends. There's more than one option for Friday dinner. They booked the whole Oracle Arena and took us all to see Cirque du Soleil. Cake played at Googleween. Random speakers like Sandra Day O'Connor, Lady Gaga, Carlos Santana, George R.R. Martin, and Bear McCreary show up for talks. We get random schwag more often.

[antirez]

Yes but IMHO the point about the original story is that, all this does not matter, mostly. Like to go to the Cirque du Soleil? Fine, plan a great weekend with your friends or partner. At work you need to find other things, and in my case those things are:

1) Work at things that you actually like, and not just technically. You should think the final product you are building if of some use, is well designed, you would use it, otherwise I would get frustrated (a lot).

2) Be able to make a difference, instead of working to a sub project of a sub project at the point it is not clear to you if you are seriously providing something worthwhile to the big picture. Usually complex organizations tend to fail in this regard, but some big orgs are organized in a way that splits people into small sub-groups handling their own project, so that individuals still can see their scope.

3) Have free time, that is, work for a reasonable amount of hours. You need free hours to have a life, to learn new things unrelated to your work (even if they are still about Computer Science it does not matter), to rest and preserve your health.

4) A friendly environment, where everybody is focused on exploiting the best potentials of co-workers. No envy, no power games, ability to recognize coworkers good accomplishments, and so forth.

I think that meals or other accessorial stuff are not enoguh to compensate the lack of one of the above.

[zyb09]

$115 per day per person? wtf I spend about 20 eur / day for food, I cant believe prices are sooo much higher in the valley.

[ChuckMcM]

I was unclear, I was trying to point out that the sort of perks rachelbythebay used in her article were inconsequential with respect to the free cash flow, even giving Google the benefit of the doubt in terms of its costs by a huge margin.

When I was there and digging into this issue from the inside one of the issues was that the cafe's predict and prepare a given amount of food and that needs to be just a bit more than is actually consumed so that they don't run out. The remainder is waste, so their cost per meal has to include the cost over head of the waste. Also the preparation staff has a salary and benefits, and there is the cost of the kitchen gear (things you and I don't expressly call out in our own costs because we are the cooks and its our kitchen). But it is always safe to use the retail prices of restaurants in the area because they are demonstrably getting by on that level of return for their meals.

One of the counter arguments an executive made to me was that you couldn't predict the quarter, and I suggested you run it 'behind' so that Q4's free cash determined Q1's level of perks, that way you spent the money you had previously banked. He did not believe there was an accounting system that could deal with that sort of setup. I suggested that Google had one or two smart people who could probably figure it out. But the resolution was 'that would be too much trouble.'

And I completely agree that its their choice on how to do it. But here is the rub, really really smart people in the bay area can work anywhere. Literally walk out on friday, and before they have used up half of their accrued vacation they can be working somewhere else. So screwing around with this sort of stuff when you could afford not to, pisses them off and they leave (see rachelbythebay's comment about 'brain drain'). The secondary effect is that one of the reasons people give for wanting to work at Google is "all the really smart people there." except that the 'really really smart' start leaving, followed by the 'really smart' who start dealing with only the 'moderately smart' because their ranks are leaving.

Its an interesting chain reaction. And of course eventually all that excess money stops coming in because the people who were really responsible for it being there in the first place are now gone, and that leaves you no choice but to cut perks even further. The system often re-stabilizes at a much much lower productivity point.

I got to watch the whole sequence at Sun in the 10 years I was there, a friend of mine watched it at Oracle. When I joined Google I was optimistic that given that Eric Schmidt had been at Sun too that he also understood the dynamic that made technology companies great, vs just ok. I was mistaken.

The process is probably irreversible at this point. Google will coast on its reputation for a while, but folks inside will feel the pain of the 'missing ones', and things that used to just 'get done' will become big projects which take too long and too many people and are always behind schedule. They will keep lowering their hiring standards as the need to back fill positions of people leaving overwhelms their ability to get anything done. The ranks will swell with earnest folks who really want to do well but the ratio of smart people to earnest (but not smart) people will fall and so effort will increase without an increase in output. Revenue per employee will start to drop, and the days when 20,000 employees to get you $2B in free cash flow will be replaced by 50,000 employees and less than a billion.

I wish it were different, but sadly I don't see an out for them.

[mjwalshe]

Up to a point - if something has been going on for a long it can become an implied part of your contract (probably less so in the US but still a danger)

And removing these little perks to save 20$ a month can have an impact on Morale out of all proportion to the cash value.

I remember one case I dealt with where a senior manager ($200,000 pa level) was very upset over losing his business needs phone line which was worth £15 a month.