Google's parent company, Alphabet, revealed its record profits amounting to $18.9 billion for the fifth quarter. The company also unveiled the second straight quarter of record revenue amounting to $65.1 billion.
Alphabet's executive told Google employees that the company would not automatically adjust the salaries to account for inflation despite the promising returns.
Google Won't Adjust Salaries
According to CNBC, Frank Wagner, the VP of compensation of Google, told the employees at a meeting on Dec. 7 that the tech giant does not have any plans to make any across-the-board adjustment as a solution to the inflation rate in the United States.
Wagner said that the company's compensation budget has a higher cost of labor that is connected with inflated prices.
However, he added that Google would rather pay increased salaries based on performance and give bonuses instead of increasing it together for all employees.
While rewarding the top-performing employees makes more sense, it could also reinforce their rankings as having to worry less about your salary can help you concentrate more on your work, and you can have more quality time off so you can recharge.
That is especially true as Google wants 80% of its employees to spend less time in offices usually located in cities with high costs of living like New York and Austin, Texas.
Google did not give a comment about this issue to The Verge. However, the tech giant told CNBC that base salary is only a part of the compensation, including their bonuses and stock.
Google reiterated Wagner's speech about the pay raise being tied to the employees' performance. In the same meeting, Alphabet CEO Sundar Pichai said that with the inflation rates in the United States being as high as 7%, some companies are making blanket salary adjustments to cover the inflation, and Google has no plans to do the same thing.
Google is an Outlier
According to the Labor Department, 4.2 million people had quit their job. This is down from the 4.4 million people recorded in September.
Meanwhile, inflation is recorded up to 6% in October. This is the highest one recorded since 1990, which means that consumers across the United States are paying more for groceries and gas, according to Business Standard.
The race for hiring the best tech talent is very intense as the COVID-19 pandemic has turned flexible work into a benefit that several office workers now expect.
While Google delayed its plans for the employees to return to the office due to the ongoing concerns about the pandemic, Google is an outlier in requiring employees to report to the physical office three days a week.
Employees working in sales can do remote work permanently, and Marc Benioff, the co-CEO of the company, said that he expects up to 60% of employees to go back to work.
Facebook stated that the employees could request remote work on an ongoing basis. Alphabet, which has 150,000 full-time employees around the world, has seen its stock and revenue increase this year, fueled by pandemic complications, and it rewarded employees who hold equity in the company.
The company's advertising revenue increased 43%, which is equivalent to $53.1 billion in the third quarter, and the stock increased up to 68%.
Related Article: Google Announces All Returning Employees Must Be Fully Vaccinated Against COVID-19
This article is owned by Tech Times
Written by Sophie Webster
