Yes.  It does.  If your site is slow, or at least much slower than your competitors'… you've got a problem.

 Google claims they are trying to give users what they want – fast opening sites.  I’m not really sure why someone would want a site that opened fast, that had poor or poorly matched content soo it’s unlikely that speed is a huge factor. 

The reality is as the world moves towards faster and faster broadband… slower and faster sites barely seem to load at different speed.  More likely this piece of the Google algorithm is more a financial decision made by Google.  As  Google has to index more and more websites… it’s cheaper for them to index SMALLER sites so they are encouraging webmaster to make their sites smaller.  How?

1. Turn Gzip on.
2. Turn caching on
3. Remove unnecessary lines of code in your html, css and js files
4. Compress images. 
5. Make sure every image size matches the height width settings of the html on the page…. Don’t resize using css or height and width in html…. Actually resize the image.
6. Make sure images have height and width values in your html
7. Reduce the number of external files called when your website opens, combine files wherever possible.
8. Use image sprites.
9. Use a fast server

Or contact the seoguys, there are so many ways we can speed up your site!