Google hiring expense controls now in place: CEO

SAN FRANCISCO (Reuters) - Google Inc has put in tighter controls over hiring during the past quarter that should help it further control cost increases from now on, Chief Executive Eric Schmidt said on Thursday.

"We're paying a lot of attention to headcount," Schmidt told investors on a conference call following the company's third-quarter report. "Going forward, you should be comfortable we did correct" the hiring expense control issue, he said.

Earlier, Google had said the company's headcount grew 15 percent to 15,916 employees during the three months ended in September. Part of the employee increase stemmed from the acquisition of e-mail security firm Postini last quarter.

Second-quarter hiring rose 13 percent at the fast-growing company, disappointing investors as operating expenses jumped to 31 percent of revenue from 27 percent in first quarter. Recent hiring was mostly in engineering and sales, Google said. Third-quarter expenses dipped to 30 percent of revenue, it said.

"We said last quarter that this has been an area where we needed to spend more time," he said. "The good news is that we have done that. The numbers you are seeing is an overhang" of months-old commitments to hire recent college graduates.

Google shares, which were trading in a narrow range following the earnings report, jumped more than $8 above their $639.62 close in extended trade after the comments.

(Reporting by Eric Auchard in San Francisco)