Sir Christopher Hohn, who runs a major hedge fund, has recently written a letter to the Alphabet. The contents of the letter reveal that Billionaire is asking Alphabet to reduce the number of employees. In addition, he also stressed the point that how the salaries of the employees are too high and thus should be lowered.
Mr. Hohn runs the TCI (hedge fund), which has been a major investor of Alphabet since 2017. Overall, the value of TCI's stake at Alphabet is $6 billion. So in a sense, we can say that TCI is among the big investors of the company, and as such, it makes sense that even Alphabet would pay attention to what they have to say!
If we look around, everybody in the tech industry is cutting costs, such as Amazon, Meta, Microsoft, and so on. In fact, even Alphabet has taken measures to lower the costs. But it seems that the BBillionaireis not satisfied and thus wants more action from Google.
Aggressive Action Is Needed
According to TCI, Alphabet's cost base is very high, which requires aggressive action from the management. This was written in the letter sent by TCI and was also made public just a few days ago. The main subject of the letter was that Alphabet's cost per employee and its employee count was too high.
The letter also stated that the headcount growth at Alphabet was 20% on an annual basis, considering it has almost doubled its employees since 2017. By the end of the 3rd quarter, around 187000 people were working for Alphabet.
When compared with the business requirements and the headcount growth history, the growth at Alphabet is excessive and thus needs to be slowed down.
He also hinted about these talks with the former executives working at the company. According to these former employees, the company could continue to work effectively even with fewer employees.