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Work-from-home saved Google a whopping $1 billion in 2020, offices may open this year

Google saved a lot of money last year and that is when the company reported a 34 per cent boost in revenues.

twitter-logoShubham Verma | April 30, 2021 | Updated 10:33 IST
Source: Reuters

Highlights

  • Google said in a filing that it managed to save around $1 billion in expenses.
  • The savings from reduced travel and entertainment were $268 million.
  • Google shut its offices worldwide last year because of the Covid-19 outbreak.

With the coronavirus outbreak last year, nearly every company went for the work-from-home model that has often been a hot topic during work culture talks. Work-from-home became the new normal, and the world's biggest tech companies were among the first ones to adopt this new system, including Apple, Microsoft, Facebook, Twitter, and Google. According to a new report, Google, specifically, managed to save up around $1 billion because a large chunk of its workforce was working from home.

As pointed out by Bloomberg, because of the pandemic, Google employees were not travelling as much as they would normally on the company's dime, and that, in addition to expenses from company promotions and entertainment, led to savings of $268 million during the first quarter this year, as compared to the same period last year. Google said in a company filing that this was "primarily a result of Covid-19." And if you calculate this expense on an annualised basis -- and because it has nearly been a year since Google shut its offices across the globe -- Google has saved more than $1 billion in expenses.

That is a big number, but not very surprising because Google had over 1.3 lakh full-time employees worldwide at the end of 2020, as per a report by Statista. And since most of these employees were working remotely, the company saved up a colossal amount in expenditure. Google is famous for going overboard in terms of giving perks to its employees, including massage tables, catered cuisine, and retreats to exotic locations. Because most workers were at home, Google managed to keep a lot of money unspent.

And that is when Google's business was not severely hit by the pandemic because the demand for internet-powered services grew dramatically last year. Google got a boost of around 34 per cent in revenues last year and if we go by the concept of "money saved is money earned", this revenue may be much higher.

Alphabet, the company that owns Google and has Sundar Pichai as the CEO, said in the filing that the advertising and promotional expenses dropped by a staggering $1.4 billion in 2020 as the company had to refocus on priorities around the pandemic. Google's parent company reduced spending, paused or rescheduled campaigns, and switched to the online-only format for some events -- such as the Google IO. Google saved up nearly $371 million last year in expenses for travel and entertainment.

Google used the savings to offset the costs incurred when hiring new talent, who were reported to be "thousands" in numbers. The marketing and administrative costs also remained flat because of the pandemic.

Although Google's expenses were quite low last year, it may not be the case this year. Unlike Facebook and Twitter that have asked most of their employees to work from home forever, Google said it will be opening offices in most locations sometime in September this year. Of course, this decision is subject to pandemic conditions but, given how many countries have recovered from the pandemic, it is likely to happen. Google will be going for a "hybrid" model where the staff will be seated with ample space between each other to reduce density in the premises.

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