Former Google CEO Eric Schmidt has complained about his former company, echoing a refrain employees have heard repeatedly for the past two years: “We don’t spend enough time in the office.”
Schmidt, who left Google in 2020, slammed the company’s work-from-home policy in a recent speech at Stanford University, arguing it’s the reason the search engine giant is lagging behind in the AI race.
“Google has decided that work-life balance and going home early and working from home are more important than winning,” Schmidt told the Stanford students.
“Startups are successful because people work hard.”
“I’m sorry to be so blunt,” Schmidt continued in a video posted to Stanford’s YouTube channel on Tuesday, “but the reality is, if you go out and start a company, if you want to compete with other startups, you’re not going to be able to allow your employees to work from home or come in just one day a week.”
Schmidt made the remarks in response to a question from Professor Erik Brynjolfsson about how Google has lost its leadership in AI to startups like OpenAI and Anthropic.
“I asked [Google CEO] Thunder [Pichai] “He didn’t give me a very insightful answer on this. Maybe you have a more insightful or objective explanation of what’s going on there,” Brynjolfsson asked the former Google president.
luck Schmidt and Google have been contacted for comment.
After Schmidt left Google, working from home became the norm.
Schmidt led Google from 2001 to 2011, after which he handed control back to the search giant’s co-founder Larry Page but remained on as Google’s chairman of the board and technical advisor until 2020.
The world of work has changed significantly since then, with companies still continuing to offer remote work for at least part of the week, even though the threat of the pandemic is long gone.
In fact, a recent survey by KPMG revealed that only a minority of CEOs believe office workers will return to their desks five days a week in the near future.
It’s worth emphasizing that Schmidt’s “one day a week” claim is an exaggeration: Like many other companies, Google asks employees to come into the office about three days a week. 2022 Diversity Annual Report.
More recently, Google has officially started tracking office badge swipes and using them as a performance metric.
But Schmidt cautions that employee backlash against strict return-to-the-office orders could actually negate any productivity gains at Google’s AI division.
WFH, RTO, and Productivity
Schmidt is not the first leader to complain that working from home is stifling innovation.
But CEOs who order their employees to work in the office five days a day, as they did pre-pandemic, risk reducing the number of innovative employees.
A huge body of research suggests that employees would quit their jobs if they were forced to return to their company’s vertical buildings.
Meanwhile, leaders who have already implemented RTO mandates acknowledge they are experiencing higher-than-anticipated turnover and hiring difficulties.
Elon Musk, for example, has been an outspoken advocate of working from the office, but he quickly found himself faced with employees calling their bosses and giving them ultimatums to either commute to work or find another job.
Twitter (now TwitterX) was put in jeopardy shortly after Musk took over when a larger than expected number of employees chose to quit rather than heed Musk’s call to become “hardcore.”
What’s more, even if employees don’t quit out of anger, they’re likely to be less enthusiastic about their jobs: 99% of companies that mandate RTOs see a decline in engagement.
In any case, the lack of innovation in Google’s AI division isn’t due to the fact that more of its staff work from home than OpenAI’s. Three-day enrollment policy.
