Pandemic benefit: Google saves $1bn in 2020 as employees work remotely

By Sayujya S, Desk Reporter
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If you are keeping count, you can add one more to the list of benefits that the pandemic has brought for the American search engine giant Google. The work from home routine, which was widely adopted as a consequence of the COVID-19 pandemic, saved more than a billion dollars for the company last year.

As the COVID-19 restrictions are gradually lifted, more people are venturing outside and booking trips and hotels online, which is very good Google’s advertising business. At the same time Google’s employees are working from home and not traveling as much on the company money which is again good for its business.

During the first quarter of this year, Google parent Alphabet saved $268 million in expenses from company promotions, travel and entertainment, compared to the same period a year earlier, “primarily as a result of COVID-19,” according to a company filing.

On an annualized basis, that would be more than $1 billion. Indeed, Alphabet said in its annual report earlier this year that advertising and promotional expenses dropped by $1.4 billion in 2020 as the company reduced spending, paused or rescheduled campaigns, and changed some events to digital-only formats due to the pandemic. Travel and entertainment expenses fell by $371 million.

The savings balance many of the costs that came with hiring thousands more workers. And the cautiousness related to the pandemic allowed the company to keep its marketing and administrative costs effectively flat for the first quarter, despite boosting revenue by 34 percent.

Google is well known for employee perks such as massage tables, catered cuisine and corporate retreats, which have influenced much of America’s Silicon Valley work culture. Most Google staff have worked remotely and without those perks since March of 2020.

However, Google plans to return to the office later this year. Chief Financial Officer Ruth Porat told investors the company is planning a “hybrid” model, spacing staff less densely than before. Mr. Porat also said Google will continue to invest in its real estate across the globe.

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