There are a couple of problems with this (not the least of which is market signaling that Google is not a place to reliably advance one's career, for anyone but

There are a couple of problems with this (not the least of which is market signaling that Google is not a place to reliably advance one's career, for anyone but the most junior staff). Clearly, it doesn't not make sense for everyone at a given firm to be in management. Facebook has recently come to this conclusion. That said, leveling and advancement at Google has always been about impact, and for the most part, employees have been able to vote with their feet (internally transfer) if they find themselves in roles that won't support "impact requirements" that justify promotion. It is utterly insane and short-sighted for Google to place such low value on things like KTLO work and optimization, and the result is the long list of deprecated and half-finished products we all know and love. The effects of these perverse incentives have been beaten to death so I won't belabor that here. However, one thing I don't see discussed much is how this same impact-driven-promo behavior leads directly to both "rest & vest" and poor management. It leads to rest & vest behavior by employees who no longer see a path upward so they cruise with minimal effort to maintain the status quo. Google as an organization does not reward Googleyness where the term is defined to mean "go outside your assigned tasks / projects to 'do the right thing'". In fact, it usually punishes people who are too Googley. Similarly, it rewards poor management because these vast quantities of employees are typically peanut buttered in such a way that everything is broken all the time and new folks constantly need to be hired to keep things running. Empire building, further supported by Google's reliance on TVCs for literally every non-product-development business process (and many functions and processes that do directly support product). Nobody knows how anything works and (see punishment for Googleyness) nobody is willing to stick their neck out too far to try and fix/change anything. There are some absolutely terrific managers at Google, but management and leadership at Google is the worst I've ever come across in my 25 year working career. This brings me to the final problem with this no-promo statement. Another common reason Googlers are dinged on perf or viewed negatively by their own leadership is when they repeatedly hit CME, maybe with a sprinkly of EE, ratings. Literally, if you are rated as "Meets Expectations" more than twice in a row you are flagged for extra review during perf calibration. If promos to L6+ are being reduced, then that logically indicates that there are fewer roles at Google scoped for L6+ impact. If that is true, then logically 1) top talent will leave (or not join), and 2) people currently in terminal roles (say an L5 SWE or an L6 TPM) have no real motivation to work harder than necessary to achieve CME since they know they can't get promoted and the bonus and equity multipliers between CME --> EE aren't really that great. Similarly, you end up with folks who, after a few years (max), are near the top end of the salary band for their level and will no longer be eligible for pay increases beyond a percent or two. Tell me, who would want to work for a company that 1) doesn't value management as a skill, 2) doesn't have logical performance metrics in place that allow all employees to articulate why what they do is important, 3) doesn't offer opportunities for advancement, and 3b) will actually fall behind CoL pay increases within a few years as a result of #3?