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This year, Google workers get phones

The G1 Android-powered phone hit stores in October. The G1 Android-powered phone hit stores in October.
Bloomberg News / December 24, 2008
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SAN FRANCISCO - Google Inc., owner of the world's most-used search engine, is giving employees mobile phones instead of cash gifts this year as it reins in costs during the recession, according to a person familiar with the matter.

About 85 percent of workers will get a handset powered by Google's Android operating system as a holiday gift, said the person, who asked not to be identified. Google handed out $1,000 cash gifts to most employees last year.

Chief executive Eric Schmidt said last month that Google is seeking to control expenses and add fewer jobs as the global slump curbs online advertising growth.

T-Mobile USA Inc. began marketing the G1 Android phone in October, offering many of the same features as Apple Inc.'s iPhone, including Web browsing. The holiday gift is separate from the performance bonus handed out by the company, the person said.

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

The memo lists 17 countries where the phone won't work, including Brazil, Russia, India, and China. Employees in those countries will receive about $400, the cash value of the phone, Google said in the memo.

Krista Bessinger, a Google spokeswoman, didn't return a call seeking comment.

Google, which offers employee benefits such as free gourmet lunches, has clamped down on costs as the recession squeezes online ad revenue. Douglas Anmuth, an analyst at Barclays Capital in New York, lowered his forecast for US Internet ad spending last week by 11 percent to $25.1 billion in 2009.

At the end of the quarter, Google had more than 20,000 regular employees, up from almost 11,000 at the end of 2006.

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