In a provocative statement, former Google CEO Eric Schmidt has criticized the company’s work-from-home culture for impeding its ability to innovate and compete effectively in the AI sector. Speaking at Stanford University, Schmidt asserted that Google’s focus on work-life balance and flexible schedules contributed to its failure to anticipate and respond to the rapid rise of ChatGPT and generative AI technologies.

Schmidt, who led Google from 2001 to 2011, suggested that the company’s prioritization of employee comfort over competitive intensity allowed startups with more rigorous work environments to outpace Google in the tech race. “Google decided that work-life balance and going home early and working from home was more important than winning,” Schmidt stated. “The reason the startups work is because the people work like hell.”

His remarks underscore a broader debate about remote work’s impact on productivity and innovation. Schmidt has long been an advocate for in-office work, arguing that physical presence is essential for effective management and fostering a collaborative work environment. This perspective was previously echoed in an April 2022 CNBC interview, where Schmidt emphasized the challenges of building strong management in a virtual setting.

Despite Google’s historical leadership in AI, the company has faced increasing competition from newer entrants in the field. Schmidt’s comments highlight ongoing concerns about Google’s ability to maintain its technological edge. The company has been striving to recover its position in AI, particularly after the emergence of rivals like OpenAI, which has spurred Google’s founder Sergey Brin to re-engage in the company’s AI initiatives.

Currently, Google mandates that most employees work from the office at least three days a week and has integrated office attendance into performance reviews, reflecting a shift towards balancing remote work with in-person collaboration.

Schmidt’s critique points to a pivotal moment for Google as it navigates the evolving landscape of technology and competition, underscoring the tension between employee flexibility and organizational agility.