Alphabet should cut more jobs, says investor in wake of Google layoffs

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Alphabet investor TCI is urging the company to “go further” in cutting jobs and reducing spending. A letter from TCI to CEO Sundar Pichai said “excessive employee compensation” should be addressed. Google’s parent company announced on Friday it was cutting about 12,000 roles. Loading Something is being loaded.

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A major Alphabet investor urged the Google parent to cut more jobs and reduce staff pay the same day it announced it would lay off about 12,000 employees.

Children’s Investment Fund Management wrote a letter to Alphabet and Google CEO Sundar Pichai on January 20, the day Google announced mass layoffs affecting about 6% of its workforce asking it to address “overcompensation of employees”.

The letter was signed by Christopher Hohn, founder, portfolio manager and managing partner of the fund. Hohn called the decision to cut jobs a “step in the right direction” but said management still had to “go further” to reduce staff.

Hohn, who has a net worth of $7.49 billion, according to Bloomberg’s Billionaires Index, recommended the company reduce its workforce to about 150,000 employees, which he said would require a reduction in the about 20% organic. At the end of the third quarter of 2022, Alphabet employed 186,779 people.

The letter asked Alphabet’s management to “seize the opportunity to address excessive employee compensation.”

“Alphabet’s average salary in 2021 was nearly $300,000, and the average salary is much higher,” Hohn’s letter continued.

“Competition for talent in the tech sector has decreased significantly, allowing Alphabet to materially reduce compensation per employee.”

The London-based hedge fund has been a significant shareholder of Alphabet since 2017, it said in a separate letter, dated Nov. 15 and also addressed to Pichai.

The November letter, also signed by Hohn, said his shares in the company were worth more than $6 billion. It included similar comments to the January letter and said Alphabet had too many employees.

Representatives from Alphabet and TCI Fund Management did not respond to an Insider’s request for comment.

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