Google to spend $9.5B this year on US offices and data centers

The news: Just as it brings employees back to offices, Google plans a major investment in its US physical footprint, signaling a continued physical growth trajectory.

• Google announced it will invest $9.5 billion in US offices and data centers this year, expecting to create at least 12,000 new full-time jobs by year’s end, per The Wall Street Journal.
• For context, the tech giant has spent more than $37 billion expanding its office and data center footprints over the past five years, including $7 billion in 2021.
• Google employees returned to the office this week for the first time since the coronavirus pandemic began two years ago. They will be working three days in-office and two days remotely in Google’s hybrid work plan, per CNBC.

What it means: Google and other tech companies embraced remote work during the pandemic, providing tools such as Google Meet and Drive, which allowed other businesses to adopt the software and follow suit. Now that its digital transformations have been adopted, the pressure is on to keep delivering.

• The market’s demand for digital innovations is triggering Google’s data center expansion—part of a global trend driven by cloud providers, social media companies, and large enterprises.
• Following unprecedented cloud growth in 2021, data centers are a hot sector for developers, with 40% of the existing global supply of hyperscale data centers currently under construction. Even more growth is expected over the next three years, per Bisnow.
• That rise in data center usage requires innovative software solutions to bolster it, created by highly sought-after software engineers that Google likely wants inhabiting its new offices.

The bigger picture: With the tech industry hardly immune to The Great Resignation, Google may have a battle ahead attracting talent to those 12,000 new roles by year’s end. Given reports of employee dissatisfaction and inevitable grumblings from workers battling traffic during their return to commuting, it’s a daunting task.

• At the same time, with IT roles in the US particularly hard to keep filled, the tech giant may have to rely more heavily on automation to maintain data centers once they’re built.
• The company’s data centers worldwide use about twice as much electricity as San Francisco, according to CNBC. As they aren’t all powered by renewables, sustainability measures are needed, like Google’s plan to invest in server materials that emit less heat.
• Scaling up and measuring the impact of such changes are becoming necessary as investors, cloud users, and the SEC insist on seeing more than decarbonization promises.