Google’s ex-CEO blames working from home on the company’s AI struggles: ‘Google decided that work-life balance was more important than winning’
Eric Schmidt was responding to a question about how Google have lost the lead in AI to startups like OpenAI and Anthropic.
Google’s former CEO Eric Schmidt has a complaint about his old stomping ground—and it’s one that workers have heard on repeat for the past two years: They aren’t working in the office enough.
Schmidt, who left Google for good in 2020, blasted the company’s working-from-home policy during a recent talk at Stanford University, while claiming it’s the reason why the search engine giant is lagging behind in the AI race.
“Google decided that work-life balance and going home early and working from home was more important than winning,” Schmidt told Stanford students.
“And the reason startups work is because the people work like hell.”
“I’m sorry to be so blunt,” Schmidt continued in the video posted on Stanford’s YouTube channel on Tuesday. “But the fact of the matter is, if you all leave the university and go found a company, you’re not gonna let people work from home and only come in one day a week if you want to compete against the other startups.”
Schmidt made the remarks in response to a question from professor Erik Brynjolfsson about how Google have lost the lead in AI to startups like OpenAI and Anthropic.
“I asked [Google CEO] Sundar [Pichai] this, he didn’t really give me a very sharp answer. Maybe you have a sharper or a more objective explanation for what’s going on there,” Brynjolfsson posed to the former Google boss.
Fortune has contacted Schmidt and Google for comment.
WFH became the norm at Google after Schmidt left
Schmidt, who led Google from 2001 to 2011, before handing the reins back to the search giant’s co-founder Larry Page, stayed on as Google’s executive chairman and technical advisor until 2020.
Since then, the world of work has undergone a significant transformation. Despite the dangers of the pandemic being long behind us, companies are largely still operating remotely—at least for part of the week.
In fact, a study from KPMG recently revealed that CEOs who believe office workers will be back at their desks five days a week in the near future are now in the small minority.
It’s worth highlighting that Schmidt’s one-day-a-week remark is an exaggeration: Like most firms, Google has asked workers to come into offices around three days a week, per the company’s 2022 Diversity Annual Report.
More recently, Google has even begun formally tracking office badge swipes and using it as a metric in performance reviews.
However, Schmidt should note that employee backlash from rigid return-to-office mandates could actually wipe out any productivity gains in Google’s AI department.
WFH, RTO and productivity
Schmidt’s 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 à la pre-pandemic risk having fewer staff around to innovate.
Reams of research suggest that workers would quit their jobs if forced to return to their company’s vertical towers.
Meanwhile, leaders who have already enforced an RTO mandate have admitted they experienced more attrition than they anticipated and are struggling with recruitment.
Elon Musk, for one, has been an outspoken advocate for in-office work—he quickly found out that employees will call their bosses ultimatum to commute to work or find another job.
Twitter’s (now X) operations were put at risk soon after he took over when more workers than expected chose to quit rather than answer Musk’s call to go “hardcore”.
Plus, even if employees don’t quit in anger, they’ll likely have less zing for their jobs: A staggering 99% of companies with RTO mandates have seen a drop in engagement.
Either way, Google’s lack of innovation in the AI department can’t be down to staff working from home more than those at OpenAI—they have the same 3-day in-office policy.
