Google parent company Alphabet has hired thousands of employees and hit record levels of revenue over the past year, but that growth isn't expected to translate into significant expansions to its office portfolio as the company keeps its foot on the brake when it comes to workspace-related real estate investments.
The Silicon Valley tech giant expects to keep ramping up hiring efforts as it plans to deploy more than $75 billion in capital expenditure expenses, investments for which are largely aimed at positioning the company at the forefront of the artificial intelligence boom that has caught the attention of tech firms around the world.
The Mountain View, California-based company's headcount climbed from just shy of 180,900 people at the end of the first quarter last year to its current workforce of more than 185,700 people, a spike Alphabet Chief Financial Officer Anat Ashkenazi said will help set the stage for growth throughout 2025 as the Google parent hones its focus on high-priority initiatives.
Alphabet's revenue for the quarter ended March 31 blew past $90.2 billion, a 12% jump compared to the nearly $80.6 billion it reported for the same period last year. The company posted a profit of $34.5 billion for the first three-month period of 2025, significantly higher than the $23.7 billion it reported for the same quarter last year.
Even with its ambitious growth plans, when asked about how the company is managing its expenses, Ashkenazi said Alphabet's top priority is investing as carefully and thoughtfully as possible while still driving the biggest returns.
"It hasn't really changed," the CFO told analysts of the company's cautious approach to growth. "We're still focused on driving efficiency and productivity throughout the organization, both in our operating expenses and in our capex spending. This helps us as we think about investments we need to make in order to drive long-term, sustainable growth."
Driving efficiencies
Similar to other tech companies around the world, Google has been on an aggressive real estate cutting spree since the beginning of 2023. The company has also made cuts to its headcount in recent years as part of the broader reorganization.
The cuts reversed a decade of expansion fueled by soaring demand for its products and services, leading the company to lease, develop or acquire large swaths of space to accommodate its record head count growth.
Google said last year in a regulatory filing that it would save $640 million by cutting back on office real estate.
And the company's days of downshifting its real estate footprint are far from over as it looks to offload more space in tech-concentrated markets such as Seattle and Silicon Valley.
The ongoing downsizing moves made by corporate heavyweights such as Alphabet have helped push the national office vacancy rate up to a record high of more than 14%, according to CoStar data.
While many stakeholders point to emerging bright spots such as return-to-office mandates or headcount growth as a foreshadowing for future demand, Google's real estate plans underscore the challenges the market faces in returning to pre-pandemic levels of leasing and investment momentum.
For Alphabet's Ashkenazi, that means continuing to look at ways the company can stretch each dollar, whether that means slowing the pace of compensation growth or making additional cuts to its real estate footprint.
"We have to be able to repurpose some of these efficiencies into higher-priority investments," she said on the company's first-quarter earnings call Thursday. "How do we make sure every dollar is used efficiently? We need to make sure we're investing in how to drive short-term as well as long-term growth."