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Regardless of whether that statement is true or not, 20% time is alive and well, based on my own experience, that of everyone else I know who's also done it and (if to a lesser extent), all levels of management having asserted so repeatedly since rumours started. I've even found it to be encouraged by certain managers to alleviate the "itch" to work on something different without having to leave one's current team.

According to this Ars article, project sunroof was a 20% project: http://arstechnica.com/business/2015/08/here-there-be-photon... (see next-to-last paragraph)

Well, most of the projects are from years ago so maybe that's true.