While Google carries out the largest downsizing in its history by laying off around 12,000 employees accounting for about 6 percent of the workforce, hedge fund billionaire Christopher Hohn advised Google and Alphabet CEO Sundar Pichai to further cut 1.5 lakh jobs to "right size" the company's cost base.
In a now-viral letter, Hohn on one hand acknowledged that it is never an easy decision to let people go, while on the other hand, he told Pichai that Alphabet (Google's parent company) has more employees than required and that the workforce must be reduced by 20 percent.
"I am encouraged to see that you are now taking some action to right size Alphabet's cost base and understand that it is never an easy decision to let people go," Christopher Hohn wrote to Sundar Pichai.
"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, the management will need to go further.... I believe the management should aim to reduce headcount to around 150,000, which is in line with Alphabet's headcount at the end of 2021. This would require a total headcount reduction in the order of 20 percent."
What a nice guy(His net worth is $7.9B) pic.twitter.com/DdudPTQTan
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— Peter Yang (@petergyang) January 23, 2023
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Hohn also pointed out that the management should also address "excessive employee compensation". The median compensation for an Alphabet employee last year was around $295,884, according to a Securities and Exchange Commission filing, the British billionaire said in his letter.
The pay was nearly 70 percent more than what Microsoft paid its employees. Compared to the 20 largest US tech companies, Alphabet paid its people 153 percent more than what competing firms offered their employees, Forbes reported.
Meanwhile, Google executives have said it would reign in its expenses and work towards a better approach when it comes to spending. According to a report in The Wall Street Journal, “Pichai said he wants to make the company 20 percent more productive."
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