Speaking to reporters today in New York, founder Sergey Brin and CEO Eric Schmidt (pictured) said people shouldn't come to the company to get rich, and shouldn't expect fancy food, Peter Kafka at All Things D reports.

Brin:

There was a period of time where the [Google] culture, as it were, was misinterpreted... When there were a few of us working in the garage... occasionally [cofounder] Larry [Page] would Rollerblade in with a few sandwiches for food. And that grew up into everybody's expectation: "Oh, they should have all the gourmet food they want, at any time." ...We decided to... significantly cut down all the snacks that had been available.

Schmidt:

Google pays very well. Google is clearly a growth company... We don't want them to come to Google for those reasons. We want them to come to Google to change the world...



....The tightening that [CFO] Patrick [Pichette] in particular did, who I think is the current Google hero, really did change the culture in a much more pragmatic way: "We're happy to work here. We're happy to be employed. We love what we're doing. Our friends, you know, have been laid off."

So, to summarize, a CEO who is a multibillionaire due to his Google stock says that you shouldn't come to the company to get rich, but to change the world. And the co-founder who has got Google investing in and renting space to his wife's company and hiring his mother in law as a consultant says Google shouldn't breed a culture of entitlement. OK.

But that puts to lie Google's old line, which was that it made crucial productivity gains by keeping programmers in the office longer with perks like free haircuts, a climbing wall, free internet-enabled buses, and, yes, free gourmet food. Here's what Brin and co-founder Larry Page wrote in an open letter to investors ahead of Google's 2004 IPO:

We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.

Brin also defended the perks in a 2001 New York Times article, saying that, compared to routine corporate costs like marketing campaigns, ''these things cost nothing." Apparently "nothing" really adds up.

At least, that's the impression Googler Steve Yegge left when describing still-cushy working conditions at the search giant. The former Amazon.com coder is based at Google's Kirkland, Washington campus, home to any number of refugees from the online bookstore and from Microsoft, right next door in Redmond.

There, the Googlers complained about the particulars of the free sweets, a sort of brazen entitlement that Yegge conceded, in an interview with ex-Microsoftie Joel Spolsky and software entrepreneur Jeff Atwood, was "kind of an issue."

At its Mountain View headquarters, Googlers now deal with those sorts of problems ruthlessly, using the tried and true tactic of public shame: A staffer who recently griped in an all-hands meeting about the dwindling supply of free food was booed in front of — and by — his coworkers (Yegge sets the scene in the attached clip).

Thanks to the recession, Google can dispense this sort of tough love to staff and still attract plenty of fresh talent, stock performance be damned. For that much it can be grateful. But Googlers should be careful who they jeer. The cream of the company will always have the chance to jump to sexier competitors.

(Clip via Stack Overflow podcast)

We've never quite figured out what Jeremy Johnstone does, besides critique other people's code, take bad pictures, and trade barbs with gossip blogs. Whatever his official job is, he apparently requires seven computer screens to do it. (In fact, Johnstone has so many screens that they couldn't fit in one photo.)

Memo to Yahoo CEO Carol Bartz: You could save a few thousand bucks, easy, by redistributing five of these screens to Johnstone's colleagues instead of buying new ones.

First Stewart hinted that their cooking skills were superfluous, since Google gave them three free meals a day. Then she asked whether they got laundry and drycleaning service like they do in California. "They're going to be asking for this in my office!" she exclaimed. Martha's nightmare, as we know, is employee entitlement creep.

Google doesn't have its own corporate jets — good thing, since that transportation perk is so déclassé these days. Instead, the company leases planes, including a set of jets jointly owned by Schmidt and Google cofounders Larry Page and Sergey Brin. Peter Kafka at MediaMemo notes that Google paid for $106,201 worth of travel to have Schmidt's "family and friends" accompany him on business trips.

Which made us think: What happened in Schmidt's life last year? Schmidt, who is married, has had a series of girlfriends on the side. (Good for him!) But he started getting serious with his most recent one, Kate Bohner, in late 2007. Bohner, who was briefly married to author Michael Lewis and is said to have inspired the character of sex-crazed Samantha on Sex and the City, lived in south Florida until she relocated to Los Angeles last fall. During the presidential campaign, she was spotted escorting Schmidt to at least one YouTube-sponsored debate.

I asked a Google spokesman if Bohner was one of Schmidt's passengers, but he declined to comment. So did Bohner fly free on the Google party plane? If so, good for Schmidt: Not every executive, in this perk-hostile times, gets to fly such friendly skies.

A tipster reports:

I was waiting to get lunch at Cafe 5ive at Google (very popular now that it's closing) today and overheard an engineer: "Can you believe this? They make 50 highly paid engineers wait in line for one lowly paid chef."

Watch out, Google kids — that "lowly paid chef"'s name is Jean-Claude Balek, and he's one tough character. He has "foie gras" tattooed on his knuckles. He's staying with Google and moving to another café. And we would not blame him one bit if he slipped a surprise into your next organic suckling pig.

(Photo by Roshan V)

A tipster reports:

Smoot-Hawley it ain't — but, google's just implemented its own horrid "buy american" policy without fanfare. Specifically: the BEERS at the company's famed "tgif" event on late fri afternoons — once a delightful array of Pilsner, Heineken, Beck's and Carlsberg Elephants — have morphed into a sad pick of Bud, Miller, Coors. Nothing was announced: it just happened! A cost-cutting move? Maybe: any googler with a taste for real beer will happily turn to tap water (since the company's discontinued bottled water too, in an obvious cost-saving moved disguised as ecological conscience;-) rather than imbibe such swill, so the sad excuses for bottles can be paraded again the following week for no money down. No idea what's happening at international location — hopefully googlers in dublin or zurich can still enjoy beers worth that name, even while their US colleagues are forced to penance via the sad array of domestic brands:-(

In an ongoing austerity campaign, Google has already hiked prices for childcare, cut in-house tech support, and Christmas bonuses. At any other workplace, these perk slashes would be expected as the economy contracts. At Google? It's proof that the world's most magical employer has become, well, just another company.

Heard of more stupid cost-cutting tricks? Drop us a line.

(Photo by haynes)

For almost five years now, Google has a sprawling network of shuttles that ferry workers from San Francisco and other parts of the Bay Area to their Mountain View, Calif. headquarters — thus sparing its employees the indignity of living in the dreary, decidedly unhip office park sprawl of Silicon Valley. Some 1,200 people ride the shuttles each day. After the company's famous free cafeterias, the shuttle is one of Google's most visible perks.

But it could be taken away so easily. Contractors pay $15 a week, and since Googlers have to swipe their ID cards to board the bus, it would be easy for the company to start charging employees and interns the same rate, or more. (A ride on public transportation costs about three times as much and takes nearly twice as long, because of Google's environmentally unfriendly location across a highway from local transit links.)

The buses have Wi-Fi and run on biodiesel, a less polluting alternative to regular gas. Google founders Larry Page and Sergey Brin have become environmental crusaders, spending shareholder money on renewable energy efforts, which might have some salutary impact on Google's electricity bills, but seem far afield from its core business of Web search.

A Google spokesman, asked for a statement, offered no comment on the record. It would strain credulity for Google to start charging. The cost-cutting symbolism would pale compared to the negative environmental impact of sending green-thinking Googlers back into their cars — not to mention the PR hit the company would take.

But it's notable that Googlers, who are generally smart and aware of the precarious state of the economy, are gossiping about the notion of losing such a beloved perk as their free ride to work. And it's telling, too, that Google wouldn't just come out and deny the rumor. That fact alone suggests it's in the realm of possibility.

(Photo by jyri)

I'm a Cisco employee, and at the company meeting going on right now, Frank Calderoni, CFO, just announced that as part of our expense reduction plans, they're going to get rid of the free drinks in breakrooms, replacing them with vending machines. He said it'll save like $12-13 million. A few slides later, the head of HR was bragging about Cisco being ranked the 6th best place to work by Fortune. I don't think they realized the logical disconnect.

Add this to Cisco's recently announced pay-to-play gym, and you wonder if Calderoni, Cisco's bean-counter-in-chief, isn't trying to turn employees into a profit center. Another in our series of corporate America's stupid cost-cutting tricks! Has your employer pinched pennies for no purpose? Send us your tales of perks and jerks.

Companies routinely underwrite loans to move executives cross-country. Pat Wadors, a senior vice president and the no. 2 in Yahoo's human resources department, has worked in Silicon Valley for 16 years, according to her LinkedIn profile. The company's loan, a source in Yahoo's finance department tells us, would allow Wadors to move 28 miles from a home in the eastern hills of San Jose to a new one in Los Altos Hills, a posh suburb 15 minutes closer to Yahoo's Sunnyvale headquarters. (The average price of homes in Los Altos Hills is $2.9 million, according to Zillow, a price-tracking service.)

Yahoo employees, still reeling from two rounds of layoffs in the last 11 months, see it as a sign of the favoritism and misplaced priorities that run rampant in the company — just another problem Yahoo's dustbusting new CEO, Carol Bartz, will have to clean up. Update: And perhaps she already has. Yahoo's flacks have emailed: "No loan was given."

What's sparking the outrage: Wadors's boss, David Windley, and founder Jerry Yang approved the loan even as they were freezing salaries in the finance department. Says our source, "Given the economic times, no problem. It was expected and we are lucky to have a job." But Wadors's loan rankled:

Since when is Yahoo in the home loan business? It's not like she was relocating from a different state. We are in survival mode. What does Carol think about this and how many other things are they doing for the execs that they won't do for us? Yahoos should stand up and demand loans from the company to pay off our credit cards bills, heating bills, tuition for our kids' schools. That money could have funded the increases for a lot of us this year or saved a few of the people let go last month.

The Sarbanes-Oxley Act of 2002 outlawed personal loans to officers of a publicly traded company. The principal exception are relocation loans for a move of more than 50 miles prompted by a new assignment which would not seem to apply to Wadors's case.

A Yahoo spokeswoman has not yet answered an inquiry about the purpose of the loan and the interest rate Wadors would pay. Our source in finance believes Wadors's loan would start below prevailing rates and gradually increase. The terms of the loan are key: 30-year jumbo loans currently have rates between 6.7 and 8.2 percent, with a 20 percent down payment. The IRS considers the interest saved on a below-market-rate loan to be compensation. And Wadors may be senior enough that such compensation might need to be disclosed to shareholders in an SEC filing. Even if the loan was made at market rate, it's questionable why Yahoo would be committing what's likely to be millions of dollars in capital to an employee's home purchase.

Perhaps this is, as employees think, a scandalous problem symptomatic of the excesses sanctioned by Yang that Bartz will have to root out and eliminate.

Or perhaps the new Yahoo CEO will see it as an opportunity. Yahoo hasn't been making much headway against Google in Web search. Why not spend its money getting into the mortgage business, at a time when so many others are abandoning it? It's not like Yahoo, for all its woes, would be any worse at the business than the banks.

Behind it: star-struck engineer Chade-Meng Tan, who's known for his disturbingly large collection of snapshots with the famous people who visit the Googleplex. Tan, a Buddhist, is shown here with Lama Surya Das, the "American Lama", explained the purpose at a recent conference, according to Soul's Code, a spirituality website:

Google wants to help Googlers grow as human beings on all levels. Emotional, mental, physical and ‘beyond the self’. (This) is why Google University instituted the School of Personal Growth, perhaps the first of its kind in a large corporation. We don’t just pamper Googlers, we want to help them fulfill their full human potential.

It was inevitable that northern California's most successful company would embrace the region's embarrassingly goofy human-potential movement. And timely, too, that Google management would try to get employees focused on their spiritual well-being, at a time when so many of the stock options lavished on engineers are worthless.

The risk for Google: that newly enlightened workers will realize that working at an overgrown advertising broker which peddles personal-injury lawyers and diet pills to Web searchers is not the ultimate route to spiritual advancement.

The Los Angeles Times carried a report about lost perks in Santa Monica, the home of the Yahoo Media Group: no more reserved parking for executives; no more fruit, bagels, and muffins; no more coffee cards (just brew-your-own Starbucks). But the best part wasn't the new cutbacks; it was the old dish on Braun's supposed excesses.

Never mind that most of the juicy gossip still told about Braun — an umbrella stolen from the employee store! a request for a corporate jet, turned down! a lavish office with its own patio — may not be true.

Braun, who joined Yahoo in 2004 with the express mission of bringing some Hollywood flair to its media operations, came to represent everything wrong about the company under ex-CEO Terry Semel. But the early parts of his career there were spent just organizing Yahoo's media properties, like Yahoo News, Finance, and Sports, into a single group. Along the way, he rapidly ran against resistance from the Silicon Valley's engineer-centric culture. When Valleywag launched in early 2006, Braun's departure seemed imminent; it ended up taking most of the year.

The infighting became legendary — like the time Yahoo's homepage producers, who then reported to rival executive Jeff Weiner, didn't bother to link to expansive Oscar coverage produced by Braun's group. Even Braun's facial tics became fodder for speculation.

So what was Braunism, this ideology that requires such ritual denouncements? Chiefly, it was the notion that Yahoo should become some kind of newfangled movie studio, producing original videos to distribute to its hundreds of millions of users. (One of Braun's ideas, really: a newscast with puppets. It was not greenlighted.) The production efforts proved expensive, and nothing Braun launched attracted a lasting audience. Meanwhile, Google was making a mint by merely indexing other people's content and hosting blogs and videos created by users.

But the strategy was Semel's as much as it was Braun's. So why do Yahoos pick on Braun? As a TV producer, he ended up as a recurring joke in Seinfeld, a show he oversaw. And his colorful malapropisms make him easy to caricature. He makes a good story. Which is why, even now, he comes up in stories about Yahoo mending its ways.

An informant familiar with the startup's excursion tells us that Calacanis had instructed workers to dress warmly and expect to be away from the office all day. This provoked a frisson of excitement, as rumor spread that Calacanis had sold Mahalo and the trip would be a chance to meet their new owner.

How depressing, then, to find themselves greeted by Mickey Mouse in Anaheim, Calif. "I am assuming he forced them to leave their phones behind to avoid all the Twitters of how much it sucked," our tipster tells us.

Facebook has been giving employees the bags, which retail for $185, for a while now — ostensibly as protection for company laptops, but really as an extravagant perk. But, like shares of Facebook, the bag is trading at a steep discount. With three hours to go, the highest bid is $41.

ChiChi212 attended one of the three, a party for engineers at Penthouse 15 on West 37th Street in midtown Manhattan. The scene: filet mignon, top-shelf liquor, and "tons of technies dancing to Soulja Boy," blogger Brittany Mendenhall writes. Another party is planned for engineers at the Westside Loft, and salespeople get a party at the Central Park Boathouse. Deborah Schoeneman estimated that this year's parties will cost half of 2007's bash at the Rainbow Room, which ran $300 a head.

The billions gushing in from Google's search monopoly don't make for a good story. Whenever Google's PR executives have looked to drum up press, they've led with the candy-colored offices, the free food, and the copious free time. All of those are now on the chopping block — which leaves not much to talk about at Google except the profits.

The Wall Street Journal takes a look at Google's new push for cost cuts. As others have reported, Google is curtailing service at its cafeterias, reducing hours and restricting guests. A third of Google's 30,000 workers are contractors — and many of those jobs will disappear. (Conveniently, when a contract ends, it's not deemed a layoff.) And superfluous offices are being shut.

More importantly, Google's employees no longer have free rein to pursue their own ideas. Google's engineers can spend 20 percent of time on side projects. That freedom remains, in theory, but the progress a lone engineer can make on a new website without hardware and additional personnel is limited. The new message: Fiddle all you want, but don't expect any money from Google to back your creation.

When Google went public in 2004, founders Larry Page and Sergey Brin told shareholders to get ready to be taken for a ride. Not in so many words, of course. But in the company's IPO prospectus, they defended the company's already-lavish perks, and said that investors should expect spending to go up, not down.

But Larry and Sergey have grown tired of coddling their employees. Far from being grateful, the perks have made employees feel entitled. Brin in particular has complained about workers taking bowls of M&Ms and free bottled water for granted.

Why should Google's founders care, really? They seem increasingly detached from Google's core business, preferring to spend time on rockets and electric sports cars rather than optimizing AdWords. They increasingly deal with a small core of early Google employees, all IPO lottery winners, who are similarly insulated from the economic reality of living in one of the most expensive areas in the U.S.

A famous example of their cluelessness: Brin allowed his sister-in-law, Susan Wojcicki, also a Google executive, to spend millions of Google's money on a new child-care center which dramatically raised its costs. Rather than revise plans to make child-care more affordable, Google started charging employees nearly twice the market rate.

Investors will be unbothered by Larry and Sergey's change of heart. And employees, after they get done grumbling, will likely content themselves with the reality that they still have jobs.

No, the people hit hardest by this will be Google's flacks — and the servile journalists who so eagerly celebrated Google's lava-lamp culture. What stories will they tell now? How Google is cutting corners on the organic foie-gras hamburgers in its cafes?

CDO-Wide Expense Management Policies

1. Year-End PTO: As announced on CEC, Cisco U.S./Canada offices will shut down from December 29 - January 2 as part of the company’s expense management initiative.
· This mandate applies to the vast majority of CDO employees. Management will notify specific CDO teams that have customer-related exceptions during the year-end shutdown period including support for Technical Assistance Center (TAC) and Customer Assurance Program (CAP) teams.
· We also strongly encourage all employees to take additional time off from December 22nd through December 24th or by the end of Q2. Taking additional PTO beyond the four mandated days can significantly contribute to your business unit cost savings and provides a well-deserved break for you.

2. Holiday Activities: All CDO teams are encouraged to celebrate the holidays, but try to find creative ways that result in no cost to the company. There should be no Business Group, Technology Group or Business Unit-funded holiday parties.

3. Hiring: A number of new Cisco-wide hiring policies were announced this week. These policies are intended to ensure that movement of talent continues to take place in strategic areas to the company.
* On Monday, November 17th all open requisitions were cancelled; CDO requisitions can be reopened with Development Council member approval. [REDACTED NAME OF AN EMPLOYEE HERE]
* Replacement or backfill positions will be approved at the discretion of the Development Council Business Group lead based on revised budget affordability.
* College recruiting programs in the US, India and China are not subject to the above requirements. They will continue to maintain CDO's strategic relationships with designated universities and to provide access to candidates.

4. Travel: Travel is an area where CDO spends a significant amount each year and where all employees can make a significant impact. You should expect reductions in the following areas based on revised budget affordability:
* Support for tradeshows in accordance with revised Marketing requirements
* Travel required for participation in standards forums

5. Project-Related Costs: Outside services, equipment expense, capital purchases and prototypes are another large area of expense management focus in CDO. Specific spend allocation on each of these areas will be managed by the Business Group to fit within revised budgets.

6. Training: As a Development Council, we remain committed to the development of our employees, even during challenging economic times. To do so, in adherence with Cisco policy, we are requiring that all training take place locally. We also ask that all CDO-employees look for ways to maximize training budgets in the following ways:
* Revisit and reprioritize development plans with your manager before you sign up for training with an associated cost. This will save on potential cancellation fees later. Refer to the CDO website for more training guidelines and ways you can continue your development and save money.