- Hello, and welcome to another Institute for Sound Public Policy podcast. I’m the Executive Director, Kevin Lynn. In this series, we offer our short take on daily stories impacting working Americans.
- Today’s story deals with Alphabet and how that company’s most popular product. Google Search, used by millions of Americans in their daily work lives, has gotten worse in the past few years and will only continue to get worse on May 3rd. The Washington, DC, District Court heard closing arguments over the Department of Justice’s antitrust lawsuit against Google. The government alleges that because Google has a monopoly over the search engine market and paid $20 billion to Apple to make Google search the default on all Apple products, “it is crippling the competitive process, reducing consumer choice, and stifling innovation.” There is another reason why Google has gotten worse. Its top leaders act more like managers and consultants than executives.
- Alphabet’s CEO, Sundar Pichai, has brought to bear all the cost cutting techniques he learned during his time at McKinsey. The management consulting firm is now infamous for inflaming the opioid epidemic with its client, Purdue Pharma. These include layoffs in U.S. based locations, growing jobs in India, and bringing in more H-1B guest workers. Last year, in 2023, the company announced it would cut 12,000 workers. Then just last week, the company announced that it would lay off core team tech workers, the very employees who engineered its flagship products. Meanwhile, the company has continued to move jobs to India, now home to the second largest population of its employees. According to our analysis of USCIS data on H-1B visa approvals, since 2016, Google has been increasing the number of its temporary contract workers; currently, 20 to 30% of the company’s U.S.-based professionals are on H-1B visas.
- H-1B workers, who come primarily from India, are paid less than American workers and are tied to their employer for the visa, allowing tech companies to have a cheaper and more compliant workforce. De-facto indentured servants, if you will. Taking a page from the management consulting playbook in which cost-cutting is prioritized. Pichai’s top lieutenant, senior vice president Prabhakar Raghavan, has been purposefully making products worse in order to extract more profit. For example, Raghavan worked to push out his predecessor, Ben Gomes, one of the original engineers behind Google Search. Raghavan was then able to force the merger of search and advertising. Now, this may have increased revenues in the short run, but it hurt the user experience because the search engine prioritized results that included their advertisers at the cost of producing results that actually answered the user’s question. In addition, people would spend more time on the website searching for their answers, and more time spent equals more ads seen.
- This is what happens when top managers with solid engineering backgrounds and experience in building a company are replaced by managers with consulting firm backgrounds. The focus inevitably shifts from crafting innovative products with solid engineering to making increasingly poorer-quality products that command market share, not because they’re better but because of the company’s ability to stifle competition.
- Thank you for tuning in, and if you enjoyed this podcast, be sure to hit the thumbs up or like button as they inform the algorithm that there is an audience for this kind of content. If you have not already done so, either subscribe or follow us. That way, you’ll receive notifications each time we upload a new podcast. Take care and see you in the next podcast.
References
- https://www.wheresyoured.at/the-men-who-killed-google/
- https://www.msn.com/en-us/news/technology/google-justice-department-make-final-arguments-about-whether-search-engine-is-a-monopoly/ar-AA1o6fFs
- https://www.inc.com/jason-aten/google-ceo-sundar-pichai-forgot-most-important-rule-of-leadership-it-could-cost-him-his-job.html
- https://freakonomics.com/podcast/is-google-getting-worse/
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