Alan Eustace, SVP of Engineering & Research, writes at Google's blog:
At Google, engineering is everything - no great engineers, no life enhancing products, no happy users. So we've spent a lot of time structuring our engineering operations to make the most of the exceptional talent that's available across America - developing local centers that give engineers the autonomy and opportunity to be truly innovative. These principles have served us well as we've grown, so when the model fails, it's doubly disappointing.I've been expecting to see Google start cutting back on expenses in various ways, as it seems to me that their model of business, with huge per-employee expenses, isn't sustainable for the long term. Apparently it's also the case that it's not cost-effective to put separate engineering centers in many locations--they probably need a critical mass of engineers and profitable projects that they didn't get here. This is probably good news for other high-tech companies and startups in Phoenix, as those Googlers who wish to stay in the Valley become available talent.
We opened our Phoenix office in 2006 and hoped that it would develop to support many of our internal engineering projects, the systems that make Google, well, Google. But we've found that despite everyone's best efforts, the projects our engineers have been working on in Arizona have been, and remain, highly fragmented. So after a lot of soul searching we have decided to incorporate work on these projects into teams elsewhere at Google. We will therefore be closing our Arizona office on November 21, 2008.
We'd like to thank everyone involved in this project for their energy and enthusiasm: our engineers; the engineering community in Arizona; Arizona State University; the city of Tempe; and the greater Phoenix area. We are now working with the Phoenix Googlers to transition them to other locations, or to identify other opportunities for them at Google.