With the lifting of the Covid-19 restrictions, more and more people are booking trips and hotels online, which is very good for Google’s advertising business. However, Google employees work from home and don’t travel as much with the company money – and that’s good for business too.
In the first quarter, Google parent company Alphabet Inc. saved $ 268 million in spending on promotions, travel, and entertainment compared to the same period last year, “mainly due to COVID-19”.
On an annual basis that would be more than $ 1 billion. In fact, Alphabet said in its annual report earlier this year that advertising and promotional costs fell by $ 1.4 billion in 2020 as the company cut spending, paused or postponed campaigns, and suspended some events due to the pandemic has switched to pure digital formats. Travel and entertainment expenses decreased by $ 371 million.
The company also said that advertising and promotion costs fell by a whopping $ 1.4 billion due to reduced spending, paused or rescheduled campaigns, and online-only events to announce its best Android phones. These savings helped offset the cost of hiring thousands of new employees.
The huge savings aren’t really that surprising as Google offers a ton of perks to its employees – including massage tables, catering kitchens, corporate retreats, and more. Google allows its employees to continue working from home until September. After that, they have to officially apply for remote work more than 14 days per year. Like many other tech giants, Google will adopt a “hybrid” model of getting back to the office. This means that employees can work in the office at least three days a week and from home on the other days.
Google is known for perks like massage tables, catering kitchens, and corporate retreats that have influenced a large part of the work culture in Silicon Valley. Most Google employees have worked remotely since March 2020 and without these perks.
However, Google plans to return to the office later this year. CFO Ruth Porat told investors that the company was planning a “hybrid” model in which employees would be less densely distributed than before. Porat also said Google will continue to invest in its real estate around the world.