Google to invest $9.5bn in US offices and data centres this year

Alphabet-owned company will also create 12,000 jobs

Google’s chief executive Sundar Pichai said it’s more important than ever to invest in the company's offices and campuses. Bloomberg

Google plans to invest about $9.5 billion in its US offices and data centres this year as the technology major seeks to get more employees back into its buildings as Covid-19 restrictions ease.

The Alphabet-owned company will create 12,000 jobs as part of the investment, chief executive Sundar Pichai said in a blog post on Wednesday.

“It might seem counter-intuitive to step up our investment in physical offices even as we embrace more flexibility in how we work,” he said.

“Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees and stronger communities.”

Technology companies have struggled to balance getting workers back to the office without causing resentment among staff members. Apple employees have also pushed back on the company’s bid to encourage staff to return to its global offices.

In March, Google asked its employees in the San Francisco Bay Area to work from their offices three days a week, which frustrated some employees who wanted to move outside of the expensive neighbourhood.

Last December, the California-based company said it would suspend employees who do not comply with its Covid-19 vaccine regulations and terminate them if they continued to violate the rules, according to an internal memo.

The deadline for compliance was January 18, after which employees who had not adhered to the rules were to be placed on “paid administrative leave” for 30 days, followed by a six-month “unpaid personal leave” with three months of benefits.

If an employee still does not comply after this period, Google will dismiss them, the memo said.

Google employs around 150,000 workers globally, with about 100,000 in North America.

The company has invested more than $37bn in its offices and data centres in 26 US states over the past five years and created more than 40,000 full-time jobs, Mr Pichai said in the blog post.

The tech major also invested more than $40bn in research and development in the US in 2020 and 2021, according to the blog post.

The company helped provide $617bn in economic activity for American businesses, non-profits, creators, developers and publishers last year, Mr Pichai said, citing the 2021 Economic Impact Report.

The Android app economy helped create two million jobs last year, while YouTube’s ecosystem supported 394,000 jobs in 2020, the chief executive added.

Google will open a new office in Atlanta, Georgia, this year and is making progress on its new downtown Austin office, according to the blog post.

“We continue to invest in our long-term office presence in New York, and make improvements to our Cambridge and Pittsburgh campuses,” Mr Pichai said.

Last September, Google said it is buying the St John’s Terminal building in Manhattan, New York, for $2.1bn, which will serve as the anchor of its new Hudson Square campus. It will be Google's largest office outside California. The financial transaction is expected to close in the first quarter of 2022.

Google also opened a new office in Portland and is investing in its Kirkland and Seattle campuses in Washington State, the blog post said.

The company will support affordable housing initiatives in California’s Bay Area as part of its $1bn housing commitment, it said. Google launched the scheme in June 2019 to help create at least 20,000 homes at a range of income levels throughout the region.