Earlier this year, those contractors reportedly outnumbered direct employees for the first time in the company’s 20-year history.
Every day, tens of thousands of people stream into Google offices wearing red name badges. They eat in Google’s cafeterias, ride its commuter shuttles and work alongside its celebrated geeks. But they can’t access all of the company’s celebrated perks. They aren’t entitled to stock and can’t enter certain offices. Many don’t have health insurance.
Before each weekly Google all-hands meeting, trays of hors d’oeuvres and, sometimes, kegs of beer are carted into auditoriums and satellite offices around the globe for employees, who wear white badges. Those without white badges are asked to return to their desks.
Google’s Alphabet employs hordes of these red-badged contract workers in addition to its full-fledged staff. They serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams — a sea of skilled laborers that fuel the $795 billion company but reap few of the benefits and opportunities available to direct employees.
Earlier this year, those contractors outnumbered direct employees for the first time in the company’s 20-year history, according to a person who viewed the numbers on an internal company database. It’s unclear if that is still the case. Alphabet reported 89,058 direct employees at the end of the second quarter. The company declined to comment on the number of contract workers.
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Other companies, such as Apple and Facebook, some of the most cash-rich public companies, also rely on a steady influx of contractors. Investors watch employee head count closely at these tech powerhouses, expecting that they keep posting impressive gains by maintaining skinnier workforces than older corporate titans. Hiring contractors keeps the official head count low, and frees up millions of dollars to retain superstars in fields like artificial intelligence.
The result is an invisible workforce, off the company payrolls, that does grunt work for the Silicon Valley giants with few rewards.
“Many of these workers don’t have a voice on the job. They don’t necessarily get the benefits that many of us think about when working at a big, glitzy tech company,” said Maria Noel Fernandez, campaign director for Silicon Valley Rising, a union-backed group based in San Jose, California that advocates on labor and housing issues. “And they’re not really part of this wealth.”
Contractors are on the rise at Google as the company spreads into new markets, such as devices and corporate services, which demand a larger sales force.
Conversations with more than 10 former contractors for Google and other Alphabet units paint a portrait of a permanent underclass. Google has a name for them: TVCs, or “temps, vendors and contractors.” They are employed by several outside agencies, including Adecco Group, Cognizant Technology Solutions and Randstad. Google declined to say how many agencies the company uses. Many current and former contract workers and full employees declined to speak on the record because they didn’t want to jeopardize their employment.
Google employees are discussing bringing to management the issue of the state of the contract workforce, according to four people familiar with the conversations. Yana Calou, an organizer with advocacy group Coworker.org, said both employees and contractors are concerned about the workers who aren’t full Google employees.
“They feel isolated, precarious and like second-class citizens,” Calou said.
In an emailed statement, a Google spokeswoman said the company hires TVCs when it doesn’t have a particular expertise in-house, such as shuttle bus drivers, quality assurance testers and doctors. Another reason for hiring is to fill temporary positions to cover for parental leave or spikes in work.
Some contract workers viewed Google as a generous workplace that boosted their careers. Still, despite their ubiquity there, many felt peripheral. Four different contractors described the sinking feeling of clocking in at 9 a.m. only to see full-timers trickle in an hour or two later. The same staff would leave the office around 3 p.m., often after a midday gym break.
“People look down on you even though you’re doing the same work,” said one contractor who spent two years at Google managing multiple other employees. Said another ex-TVC: “You’re there, but you’re not there.”
The largest burden for many contractors is health care. All the contractors Bloomberg News spoke with said the contracting agencies, which are responsible for health insurance, offered either inadequate plans or none. One former TVC, who worked for Adecco, said he paid roughly $600 out of pocket a month for coverage to treat diabetes. “Adecco’s only around for [human resources] and crappy benefits,” this person said.
In recent years, Google has brought some contract positions in-house. After criticism in 2014 it announced that some security guards would become direct staff.
Most contractors do not work longer than two-year stints, according to multiple contract workers, but some serve multiple terms in the hope of becoming direct employees. Google did not provide data on how many achieve that.
And for many white-collar TVCs, the second-class status at the first-rate tech behemoth pays off. TVCs are asked to list their status as contractors on LinkedIn accounts — but they can still mention Google. Chris Szymczak, a former TVC who worked on marketing for Google from Poland, said multiple full-time co-workers served as a reference for future work. “They were just immensely supportive even past our work relationship,” he said. “The gig was a real springboard for me.”
That ladder is not available for everyone. One former TVC recalls an uncomfortable lesson. A new executive came to the division, sat down with each staffer and asked about his or her “five-year plan,” a standard managerial tactic. The next day, the manager returned sheepishly, explaining that he didn’t realize his report was a contractor rather than full-time staff. He asked that they forget their conversation entirely.