Hedge-fund billionaire Christopher Hohn has urged Alphabet to widen its job reduction actions to at least 20% of the company, saying 12,000 layoffs are not sufficient enough to reduce the tech giant’s cost base.
Hohn, the billionaire founder of activist hedge fund The Children’s Investment Fund Management, which holds a $6 billion stake in Google parent Alphabet
He said that Google staff are overpaid and the 12,000 layoffs, which equate to around 6% of Alphabet’s workforce, should be extended to at least 20%.
“The 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,” Hohn wrote.
He suggested that Alphabet cut its workforce to around 150,000, its total headcount at the end of 2021.
Hohn also called for Google to look into “excessive employee compensation.” The median Alphabet salary in 2021, he says, was nearly $300,000 and the average salary is higher.
“Competition for talent in the technology industry has fallen significantly allowing Aplhabet to materially reduce compensation per employee,” Hohn explained.
He added that Alphabet should limit stock-based payouts to employees “given the depressed share price.” Alphabet’s A class shares have dropped 25% over the last 52 weeks.
In November, he told the company that Alphabet had too many employees and pushed for cost cutting measures.
He is also not the first investor to demand tech companies to aggressively streamline their operations. A number of hedge fund managers investing heavily in tech stocks have recently called for sizeable cost reductions, including job cuts.