Google Cloud has been on a hiring tear over the last few years, bringing on the salespeople it needs to fulfill CEO Thomas Kurian's goal of entrenching the search giant as a cloud superpower.
Now, four current and former employees at Google's cloud arm tell Insider that many of those salespeople are increasingly worried and frustrated about a new compensation structure that was implemented earlier this year. The structure, they say, means they're unlikely to qualify for as much as 25% of the annual bonuses that make up the majority of their pay packages.
Some employees fear the situation is a prelude to layoffs. One current employee says some at the cloud division suggest it may be planning to cull underperformers on the sales team.
"I think you're seeing frustration from salespeople now, many of whom are used to making hundreds of thousands of dollars in bonuses," says another current employee.
The employees who spoke to Insider say the pandemic is at least partly to blame, making it harder for Google Cloud's sales staff to take the in-person meetings that can make or break a sales pitch to a big customer.
Some of those salespeople believe that Google Cloud's compensation plan doesn't make nearly enough allowance for just how much that slowed down the sales process, and now feel that they could be unfairly penalized for it, the sources said.
Google Cloud, for its part, says that its compensation plans for its sales teams "are structured to be competitive in the market."
"We have a high bar and hire top talent in order to provide the best experience for customers," a Google Cloud spokesperson said.
The issue's origin dates back to 2019, when Google Cloud instituted a new compensation structure that saw salespeople's base salaries reduced in favor of a new emphasis on performance-based bonuses — a common tactic at companies like SAP and Oracle to incentivize salespeople to close large deals, Insider previously reported. One Google Cloud employee estimates that commissions now make up 60% of most salespeople's annual pay.
Google Cloud's compensation plan was updated earlier this year, reflecting a change in priorities as it marches towards profitability. Today, 25% of a salesperson's bonus is tied to their success in winning over new, or "greenfield," clients, three sources said.
But insiders say Google Cloud's leadership didn't do enough to spell out what they needed to do to secure this chunk of their bonus, how the new targets would be assessed, or to consider the impact the pandemic has had on salespeople's ability to win over new clients.
The new system has caused consternation within the division's sales ranks in recent weeks, insiders say, with employees unexpectedly receiving "Needs Improvement" grades in their regular performance reviews (as opposed to "Meets Expectations" or "Superb"), making them ineligible for that chunk of their bonus.
A current employee feels as if the rug was pulled out from under the company's sales divisions, especially after Google Cloud's big sales hiring push.
"It was a bad strategy because it showed that Google Cloud took advantage of people to join sales, do a great year, and now they moved the plan to a bad model which is similar or worse than the industry now," the employee said.
Notably, not every employee feels this way: One current employee says that "the communication along the process could have been better," but ultimately feels that it was the right move to help grow the business.
"Any time, most people are resistant to change, and any change like that which affects your income, you're going to have pushback," that employee said.
Got a tip about Google Cloud? Contact reporter Rosalie Chan via email at rmchan@insider.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request.
You can also contact Google reporter Martin Coulter via email at mcoulter@insider.com, Signal at +447801985586. Reach out using a nonwork device.
