VentureBeat

When I took a video tour of Google in 2007, I marveled at all of the things the company was doing for its employees, from free food in the cafeterias to subsidized medical care. My guide, Susan Wojcicki, was particularly proud when we stopped in front of the childcare facility and talked about how Google had a low-cost facility for parents. This perk was part of what made the company the “Best Company to Work For” for the pat two years and undoubtedly put some meat behind the slogan that Google would “do no evil.”

Fast forward to today. Google’s stock price is no longer above $700 a share. It’s down to earth, so to speak, at $537. And Wojcicki (pronounced Wo-jis-key), who is the sister-in-law of Google cofounder Sergey Brin, figures prominently in a New York Times front page story on how Google is fumbling its leadership as a company that subsidizes childcare costs for its employees.

Now Google realizes just how much the childcare costs, is switching to an educational system (the Reggio Emilia freestyle system) that Wojcicki likes, and is planning to phase in higher fees for the childcare over the next five quarters. The story alleges that Brin said at a company meeting that he had no sympathy for parents who complained about the fee increases and was tired of Googlers who expected such perks. Google denied he said that. The article, by Joe Nocera, concludes that Google is becoming like just another company. No doubt there are chuckles inside Microsoft, a company with great benefits that chose not to match the largesse of Google. “They’re finally coming down to earth,” the critics would say.

Google can’t afford to lose the perception that it’s a special place to work. Hiring sharp employees has certainly been the key to its competitive advantages over rivals like Microsoft and Yahoo. The company has lower turnover rates than other companies in Silicon Valley, where poaching is common and employees are accustomed to seeking greener pastures at the next hot company. Facebook and other Web 2.0 firms have that status, but not Google. It’s noteworthy that Google just decided to close a couple of offices. And if search revenues stall, then we’re likely to see a lot more cutbacks.

In such an environment, It would only make sense for the company to shave back on its expenses, reduce its employee benefits, and eventually cut back on staff. Any sound manager would take away the benefits from employees that once attracted them to join it. But it would also be the beginning of a kind of Greek tragedy for the company. A meteoric rise, followed by a humbling fall, when so much is left on the table as “might have been.” I’m not saying a bad childcare-fee increase is going to bring Google down. But it’s certainly a bait-and-switch on employees who signed up because of the promise of such benefits.

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Tags: co:google, co:microsoft