Google ’s parent company , Alphabet Inc , was told it needs to make aggressive cost - cutting movement after receivinga letterfrom activist hedge store TCI Fund Management .
The London - base hedge fund , TCI , is owned by billionaire Christopher Hohn who wrote a letter to Alphabet ’s chief operating officer Sundar Pichai on Tuesday urging the company to make fleet decision to reduce its financial yield .
“ This development is excessive , both in relation to historical headcount development and what the business requires , ” Hohn said in the varsity letter . “ Our conversations with former executive of Alphabet suggest that the business could be function more in effect with significantly fewer employee . ”
Photo: ORSTEN SILZ/DDP/AFP (Getty Images)
Alphabet Inc ’s stave numeral have increase at a rate of 20 percent annually , almost doubling in growth to a stupefying 187,000 employees since 2017 , and it has one of the in high spirits salaries in Silicon Valley .
The letter also notes that Alphabet Inc ’s 14A filing designate faculty ’s median recompense was $ 295,884 in 2021 , making it 67 per centum high than Microsoft and “ 153 percentage eminent than the 20 largest list engineering companies in the US . ” The median wage for the top 20 engineering companies hover around $ 117,000 while Microsoft volunteer an annual salary of $ 177,858 . The letter of the alphabet argue against these number , saying , “ There is no justification for this enormous disparity . ”
“ We recognise that Alphabet employs some of the most talented and brightest electronic computer scientist , ” the letter said , “ but these be only a fraction of the employee base . ” However , for Alphabet ’s nonengineering staff , the letter allege their compensation should hang “ in dividing line with other technology company . ”
Alphabet ’s also being told to eliminate dearly-won prospicient - terminus wager such as theself - driving car project Waymo , with the letter read Alphabet ’s away bet cumulatively generated only $ 3 billion but obtain a substantial loss of $ 20 billion over the last five years .
TCI go down just outside Alphabet ’s top 20 largest shareholders , grant toCNBC ’s David Faber .
Alphabet Inc did not forthwith respond to Gizmodo ’s asking for comment .
Google is one of the only outliers so far to desist from cutting back on employee . The letter point to other technical school companies like Meta and Twitter as examples of businesses that have recently slashed head count . The letter pop off on to quote Altimeter Capital ’s Brad Gerstner who write , “ It is a poorly kept secret in Silicon Valley that company ranging from Google to Meta to Twitter to Uber could reach similar levels of revenue with far fewer people . ”
The news add up as Facebook ’s parent companyMeta lay off about 11,000 employees , Twitter reduced its staff by 3,700 jobs , andThe New York Timesreported Amazon design to lay off10,000 employee , marking what some are calling the ending of Silicon Valley ’s golden era .
“ This company could n’t go on forever , ” Margaret O’Mara , a professor at the University of Washington and author of The Code : Silicon Valley and the Remaking of America toldThe Guardian . “ In many way , we are just going back to normal after a huge ladder - up during which everything became supersized . ”
There have been more than 121,000 layoffs across 789 technical school party in 2022 according tolayoffs.fyi , a site that tracksjob cut across the tech industry . The numbers have jumped from 3,625 layoffs in February of this year to 25,563 within the first one-half of November .
However , despite the sudden uptick in layoffs and cost - turn off exploit , O’Mara separate the release she does not think this will be the end of the Silicon Valley technical school industry . “ The manufacture obituary has been written prematurely a few times , ” she said . “ It may be the end of an era for Silicon Valley , but it is unlikely to be the end of Silicon Valley , ” she tot .
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