Former Google CEO Eric Schmidt blames telecommuting for the company’s AI woes

Schmidt, who left Google for good in 2020, criticized the company’s work-from-home policy during a recent talk at Stanford University, while arguing that it’s why the search engine giant is lagging behind in the AI ​​race.

“Google has decided that work-life balance and going home early and working from home are more important than winning,” Schmidt told the Stanford students.

“And the reason startups work is because people work like hell.”

https://www.youtube.com/watch?v=LxDM8io4lUA

“I’m sorry I was so blunt,” Schmidt continued in the video posted Tuesday on Stanford’s YouTube channel. “But the truth is, if you all leave university and go start a company, you’re not going to let people work from home and you’re only going to come in one day a week if you want to compete with the other startups.”

Schmidt made these remarks in response to a question from Professor Erik Brynjolfsson about how Google has lost its lead in AI to startups like OpenAI and Anthropic.

“I asked (Google CEO) Sundar (Pichai) that, he didn’t give me a very clear answer. Maybe you have a clearer or more objective explanation for what’s going on there,” Brynjolfsson posed to the former Google boss.

wealth has reached out to Schmidt and Google for comment.

WFH became the norm at Google after Schmidt’s departure

Schmidt, who led Google from 2001 to 2011 before handing the reins back to the search giant’s co-founder Larry Page, remained Google’s executive chairman and technical adviser until 2020.

Since then, the world of work has undergone a significant transformation. Despite the fact that the dangers of the pandemic are long behind us, companies are still operating remotely, at least for part of the week.

In fact, a study by KPMG recently revealed that CEOs who believe office workers will return to their desks five days a week in the near future are now in the small minority.

It’s worth pointing out that Schmidt’s one-day-a-week remark is an exaggeration: Like most companies, Google required workers to come into the office about three days a week, according to the company’s 2022 Annual Diversity Report .

More recently, Google even started officially tracking badge swipes from the office and using them as a metric in performance reviews.

However, Schmidt should note that employee backlash from rigid back-to-the-office mandates could actually wipe out any productivity gains in Google’s AI department.

WFH, RTO and productivity

Schmidt is not the first leader to complain that working from home kills innovation.

However, CEOs who order their staff to work from an office five days before the pandemic risk having less staff around to innovate.

Numerous studies suggest that workers would quit their jobs if they were forced to return to their company’s vertical towers.

Meanwhile, leaders who have already implemented an RTO mandate have admitted they’ve experienced more attrition than they anticipated and are struggling with recruitment.

Elon Musk, for one, has been an outspoken proponent of office work — he quickly learned that employees would call their bosses ultimatums to commute or find another job.

Twitter’s (now X) operations were put in jeopardy shortly after he took over, when more workers than expected chose to quit rather than heed Musk’s call to get “hardcore.”

What’s more, even if employees don’t let go of anger, they’re likely to have less enthusiasm for their jobs: 99% of companies with RTO mandates saw a drop in engagement.

In any case, Google’s lack of innovation in the AI ​​department can’t be due to staff working from home more than OpenAI – they have the same 3-day office policy.

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