Google Staff Ready to Bail?
DZ
The entire economy is taking a hit from the current financial crisis, and Google is no exception. Today Google shares are trading at $340, which is $100 less or 22% off the price they were on September 25, 2008 ($440). A huge chunk of the options granted to employees (approximately 7.4 million shares) have a strike price of $440 or above. A lot has changed since September 25th and they could change again and be back in the money. But presently, 75% of the stock options granted to employees are worthless.
Suddenly, the mood at Googleplex is not so cheery. Officially, Googlers say that it is a great place to work and that it is not about the money. But off the record, you will hear and see a different story. With 75% of the employees sitting on worthless stock, the anxiety level is increasing. Google has established a plan with Morgan Stanley (which might go under) allowing employees to sell vested options on a secondary market; but, approximately 60% of the options have a vesting period of eight years. All data available in Form 10-Q for the quarterly period ended June 30, 2008.
Reality has set in. Many Googlers are realizing that it is no longer a quick ‘get rich’ option. Many took huge pay cuts in the hopes that they could make-up for it in stock. Now, they are caught in a catch-22 situation. Many are starting to look elsewhere and most places - at least in Silicon Valley where most Googlers are - have a hiring freeze.
To make matters worse, most of the hiring at Google happened after 2005 when the boom was in full swing. Google, too, was firing on all cylinders and needed bodies company-wide. Employees were recruited from practically ever company in the valley. In the rush to jump onto the Google express, many employees burnt bridges with their previous employers. Many projects were dropped mid-stream often costing their previous employers millions and jeopardizing their product lines. A CEO of a major Silicon Valley company said, “They have no friends left.” He said his companies have disallowed the use of Google products and I hear two more companies are following suit.
However, Google was smart in its hiring. To feed its appetite for bodies, Google often hired many low-level employees that were dissatisfied with their previous jobs or those who wanted a chance to make a difference or achieve their highest potential. A former Google manager said, “We told them that they were SMART.” Today, those same employees are having a hard time finding work because of the economy or they burnt bridges or their old jobs are being done by recent grads. And frankly, while they were in the Google bubble, the surrounding economy has caught up or passed them by in many instances and their skills are not up to par with the demand of learner competitive tech companies. Nor, is saying you work at Google an advantage as it once was.
Many in the tech community in the valley are unsympathetic. They say, “On the way up, no Googler cared about us, so why should we care about them now!”
Tags: Googlee, Stock, Technology Stocks