Cost of Day Care Sparks Discontent at Google HQ

Google is under fire from a handful of parents who work at the company's Silicon Valley offices for price hikes in the cost of on-site day care services, the New York Times reported Saturday.

The Times paints complaints about changes in the Internet search leader's day care policies as one of a number of problems to emerge in the wake of rapid growth and a stagnant stock price, including the growth of internal bureaucracy and some employees departing to joint start-ups.

The story is based on complaints and internal memos (http://tinyurl.com/valleywag-memos) disclosed by self-titled "Silicon Valley gossip rag" Valleywag last month that portrayed the changes as designed to please an inner circle of employees around co-founders Larry Page and Sergey Brin.

Google spokesman Matt Furman said planned day care policy changes and price increases are primarily designed to support a significant expansion of day-care for the children of Google employees working at its Mountain View headquarters.

"We had a situation in which we provided day care for 200 kids and 700 others couldn't get in," Furman said.

"The whole premise of these changes was to eliminate a 700-person waiting list."

Under price changes to be phased in over the next five quarters, parents of a preschooler can expect to pay $1,116 a month by October of this year and $1,710 by October 2009.

Furman said the prices, while eye-popping in many regions, are competitive with top-notch day care pricing in San Francisco.

By reducing subsidies it was paying for child care, Google has been able to expand the number of kids in its day care program by 150 percent, Furman said. He denied reports the company is seeking to adhere to a specific philosophy of child-raising and said multiple approaches would be offered.

He said Google's executive management team has approved the changes in a bid to expand availability of day care for the company's roughly 20,000 strong worldwide workforce.

The criticism of Google, famous for making loads of money while seeking to avoid "doing evil," follows the company being named for a second year running Fortune magazine's "Best Company to Work For."

"It may be a stretch to equate the day care fiasco with the fall in Google's stock. But maybe not," wrote Joseph Nocera, a financial columnist for the Times.

Shares of Google peaked at $747 in November, fell to $412 by March and closed at $537, up 2 percent Thursday.

Copyright 2009 Reuters. Click for restrictions.