What should a company do if it is very publicly losing employees to an upstart social network that you have disagreements with?  Do you try to stop each employee who comes up to you and says, “Hey, they made me a heck of an offer, and I’m going to take it”, or do you make one huge gesture to try to appease everyone in one swoop?  Well, if you’re Google, and you’re losing key employees to Facebook, it appears you do the latter to the tune of a little over a billion dollars.

Business Insider reported yesterday that a source had come forward with the news that Google was giving every employee a $1,000 holiday bonus, and as of Jan. 1st, 2011, all employees would receive a ten percent increase in pay.  Before you scoff at the $1,000 bonus, Google also said it would pay all taxes on the bonus so that the employees would get all of the money, and when you realize that the company has 20,000 employees, that means it just dropped over $20 million on them.  As for the pay increase, estimates are running that it will come to over $1 billion a year.

Google LogoIn other words, everyone from the night custodian to CEO Eric Schmidt just got a whole lot more money.  Of course, Google would never admit that this grand gesture was an attempt to fight off further pilfering by Facebook, but it’s a little difficult to ignore.

TechCrunch reached out for a comment, and in an unusual turn for Google, they actually responded:

While we don’t typically comment on internal matters, we do believe that competitive compensation plans are important to the future of the company.

While it obviously doesn’t name Facebook, it’s fairly obvious that is the motivation behind this move.

So, congratulations to all of the Google employee’s on their pay increases … now lets see what Facebook does to step up its game.