As Google Inc. (NASDAQ: GOOGL) continues to grow, the company has to be mindful of how to more efficiently run its massive empire. According to a recent article from the Wall Street Journal, Google is pursuing this strategy by curbing its hiring.
Source: Wikimedia Commons (Lee-Sean Huang)
Most likely the company will address this subject more when it reports its second-quarter financial results on Thursday after the markets close. Currently Thomson Reuters has consensus estimates that call for $6.70 in earnings per share (EPS) on $17.75 billion in revenue. The same period from the previous year had $6.08 in EPS on $15.96 billion in revenue.
However, the tale of the tape for this coming earnings report will be if the recently hired chief financial officer (CFO), Ruth Porat, has had enough time to improve cost efficiencies. She was just hired in late May. Previously, Porat acted as the CFO for Morgan Stanley, where she was known to reduce expenses and reallocate capital. The Wall Street Journal reported that she currently is involved in an internal audit examining costs, revenue and accounting systems.
In the first quarter, Google added 1,819 employees, which made the new total more than 55,000. It is worth noting that this increase was the smallest since the fourth quarter of 2013. In 2014, Google added an average of 2,435 employees per quarter.
ALSO READ: New Changes to UBS Quality Growth at a Reasonable Price List
Part of this was due to Google executives putting stricter controls on the hiring process. For example, Google teams now have to submit plans that detail why the addition of employees will help in the accomplishment of specific business objectives.
In a sense, trimming or curbing the hiring process will help produce efficiencies, allowing for more sustainable growth over the longer term.
Larry Paige, chief executive of Google, explained back in December that the company needs to understand the balance of long-term investments against the risk that a weak stock price might dent employee morale or even hurt recruiting and retention. Reportedly, the message at that time was that Google will be more disciplined going forward regarding an increase in the workforce without a similar increase in revenue. This is in consideration of its past acquisitions increasing the company’s overall headcount.
Class A shares of Google were up 2.2% at $584.22 on Tuesday. The stock has a consensus analyst price target of $638.90 and a 52-week trading range of $490.91 to $608.91.
ALSO READ: UBS’s 4 Top Technology Stocks to Buy Now
Smart Investors Are Quietly Loading Up on These “Dividend Legends” (Sponsored)
If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.
Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
