Google is investing $ 7 billion in post-pandemic office bet

The spending commitment follows a slowdown in investment by Google about a year ago, when the scale of the Covid-19 crisis began to take shape. Last April, Alphabet and Google Chief Executive Sundar Pichai told staff in a memo that Google would delay hiring during the pandemic.

Like other major tech companies, Google has boomed in the past year by taking advantage of an accelerated shift in online ad spend. Despite that growth, planned US investments for 2021 are below pre-pandemic levels; it invested an average of $ 11 billion a year in 2018 and 2019.

The company said this year’s investment plan focuses on existing locations, but it will also create three new office locations, in Minnesota, Texas and North Carolina, and expand Google’s presence to 19 states. The company said it would add thousands of features at existing locations in Atlanta, Washington, DC, Chicago and New York, and extend a year-long effort to increase its footprint outside of Silicon Valley. Alphabet reported more than 135,000 employees worldwide last year.

“Getting together in person to collaborate and build community is at the heart of Google’s culture,” said Mr Pichai in a blog post on Thursday. “And it will be an important part of our future.” Google’s announcement comes about a week before Mr. Pichai appears before Congress with Facebook’s chief executives Inc.

and Twitter Inc.

for a hearing on disinformation on internet platforms.

Google has more than doubled its number of data centers in the US since 2018, due to the growing amount of digital information generated daily by individuals and businesses. The company has invested heavily in its cloud business in recent years as it seeks growth beyond its bread and butter ad revenue. Last year, it began breaking out revenues for its cloud unit, and reported revenue increased 46% to $ 13.08 billion from 2019. Costs were up 51% to $ 5 billion over the same period.

The expansion of data centers by Google and other technology companies typically delivers a shock to construction-related jobs, but requires minimal staff after they are completed. The facilities can be many times the size of a Walmart Supercenter, but employ less than 100 people to service equipment.

Google’s announcement is also because large companies are rethinking their office work after a year of many employees working from home. Google was one of the first major US companies to formally extend the time period for employees to work remotely, and decided last summer that it would let staff work from home until at least July this year. As Covid-19 cases stabilize or decline in many places and vaccinations accelerate, executives are now debating when and how to return to offices.

The search giant now expects employees to return to their offices in the fall and plans to allow employees to work remotely two days a week. The policy is somewhat different from other tech companies such as Twitter and Facebook, which plan to have more of their employees work remotely after vaccine distribution expands.

Other tech companies have accelerated investment outside the Bay Area. After employees were urged to experiment with working remotely from other locations, many have chosen to make those moves permanent. Austin, Texas, has been a special hot spot for tech employment.

Write to Parmy Olson at [email protected] and Tripp Mickle at [email protected]