In a letter dated January 20 and addressed to Google and Alphabet CEO Sundar Pichai, hedge fund billionaire Christopher Hohn said that the company’s “decision to cut 12,000 jobs is a step in the right direction, but it does not even reverse the very strong headcount growth of 2022” and that “the management will need to go further.”
Pichai recently said that Google hired “for a different economic reality than the one we face today” after it saw periods of dramatic growth over the past two years.
Second letter in three months
It is to be noted that this is his second letter in this regard with the previous one coming on November 15, 2022.
“I argued in my previous letter that Alphabet’s headcount has grown beyond what is required operationally. Over the last 5 years, Alphabet more than doubled its headcount, adding over 100,000 employees, of which over 30,000 were added in the first 9 months of 2022 alone. The decision to cut 12,000 jobs is a step in the right direction, but it does not even reverse the very strong headcount growth of 2022. Ultimately management will need to go further,” he said.
Google should “address excessive employee compensation”
Apart from suggesting that Google should fire 1.5 lakh employees, he also said that the company should “address excessive employee compensation”. The investor also advised Pichai that Alphabet should limit stock-based compensation.
“The median salary at Alphabet in 2021 amounted to nearly $300,000, and the average salary is much higher. Competition for talent in the technology industry has fallen significantly allowing Alphabet to materially reduce compensation per employee,” he said.
As per a report by The Telegraph, the founder of The Children’s Investment Fund Management (TCI) holds a $6 billion stake in Google-parent company Alphabet.
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