Business - Google Hands Out Phones, Not Cash, as Holiday Bonus

Patricia Resende

While Internet search giant Google handed out cash to employees last year, the company is scaling back and giving its workers a different kind of gift this holiday season.

Google is giving its employees a taste of its own Kool-Aid by passing out Android-based mobile phones to at least 85 percent of employees, a person described as "familiar with the matter" told Bloomberg News.

"The current economic crisis requires us to be more conservative about how we spend our money," Google said in an internal memo that was posted on technology industry blog Valleywag.com.

Because the phone will not work in more than one dozen countries, including Turkey, Kenya, Brazil, Russia and India, Google is instead giving $400 to employees in those countries, which is the cash value of the phone.

Cash-Strapped or Celebration of Android?

Gone are the days of huge cash bonuses and all-expenses-paid holiday weekend trips to the Caribbean.

Instead, companies are finding ways to cut costs, making drastic changes including cutting thousands of jobs, cutting back on plans to expand, and spinning off other businesses in order to turn around a profit for shareholders -- and in an effort to stay afloat.

Adobe Systems, Viacom, AT&T and Circuit City are just some of the companies that have cut between 600 and 5,000 employees in recent weeks.

Google, while successful, has also felt the pinch of the economic downturn and has also had to scale back. Last month, the company quietly cut a reported 3,000 contract positions.

So Google's explanation behind its move should not be shocking to employees.

"Some of you will of course be wondering why we decided to change from a cash bonus to the Dream phone," Google states in the posted memo. "Here are the reasons: First, we've never developed anything like the Android software before and this represented a unique opportunity to celebrate that achievement."

"Googlers globally have been asking for the Dream phone, and we're looking forward to seeing all the different things that you do with them," the company said. "This is a chance for us to once again dogfood a product and make it even better! We felt that giving the Dream phone would be a great holiday present -- something we could all celebrate."

Bloggers React

Bloggers are fired up about Google employees who are not gracious about receiving the mobile phone as a bonus.

Bloggers say Google employees should be happy that they are receiving a bonus in such hard economic times and should be thankful that they are not being sent home for the holidays with a pink slip, as many in the technology industry have in recent months.

Google employees will receive an e-mail from Google's "Holiday Gift Team" in each office with the logistics of when they will receive their phone, according to the company.