No One Believes Google's Hiring Freeze Denial

(MoneyWatch)  Google denies it, but no one believes them. Everyone thinks there's a hiring freeze at the company. And by "everyone" we're referring to ZDNet, CNBC, and the WSJ. (Why else would they run with the denial?) On its face, it does seem implausible. Check out the company's Q3 numbers: Revenues up by more than $1 billion. Net income up around $300 million. Cashflow positive by something like $500 million. The numbers are so huge it seems pedantic to not round them off.

But this story is in fact several months old. In April, CNET quoted CEO Eric Schmidt complaining on CNBC that Google could not keep up with new hires. Said Schmidt:

We really didn't have a good sense of what people were doing.

In July, Wired reported rumors of a hiring freeze and said Google was in a period of "retrenchment." Valleywag said the same thing at around the same time. And Silicon Alley Insider produced a really nice graphic illustrating Google's hiring cutbacks.

More importantly, pay attention to what Google is actually doing. In its Q3 conference call it noted that the company only hired 500 people in the previous three months. The company previously doubled its headcount to around 20,000 in two years. CFO Patrick Pichette used the word "disciplined" to describe his hiring policy.

Later in the call, however, he gave the reverse signal:

We have continued to hire. We just hire in many areas. We are continuing to hire because we have a lot of needs and then what we are doing is just doing responsibly. So there ?€" we will continue to hire, that is why you see the net improvement in headcount.

On the whole, it seems that there's a realization inside Google that the pace of its hiring is somewhat ridiculous. This is compounded by the ludicrous benefits that Google showers on its employees. Consider: Sauna, massages, three free meals a day, roller hockey, transport, dry cleaning and hair stylists.

This is an advertising media provider behaving like a Roman Emperor in decline. The only question is whether Schmidt has changed his mind on this issue. Back in April, it was clear that he was on the Nero/Caligula side of the debate. He said:

Every day I turn around, there's some new benefit that we've come up with for our employees ... It's part of our culture. We're happy to do that. And, of course, we have gross margins to afford it.

Since then, the world has changed. It looks less kindly upon companies who employ a "massage programs coordinator" named Babette. Hence, Google's denials of a hiring freeze become less believable.