January 29, 2023

Final replace: January 24, 2023 12:23 PM EST

Google CEO Sundar Pichai (file picture)

Alphabet, the guardian firm of Google, has minimize 12,000 jobs, or 6% of its workforce.

Billionaire hedge fund investor Sir Christopher Hohn advised Alphabet and Google CEO Sundar Pichai to chop jobs and push headcount to 150,000, which might require him to chop a complete of 20% of overpaid jobs.

Alphabet, the guardian firm of Google, has minimize 12,000 jobs, or 6% of its workforce.

In a letter that went viral on social media, Hong advised Pichai that the choice to chop 12,000 jobs is “a step in the suitable course” however that it “would not even reverse the very sturdy headcount development in 2022.”

“I consider that administration ought to purpose to scale back headcount to round 150,000, which is identical as Alphabet’s headcount on the finish of 2021. It will require an general headcount discount of round 20 %,” Hong, founding father of The Kids’s, wrote. Funding Fund Administration (TCI), which owns a $6 billion stake in Alphabet.

The billionaire additionally stated that administration must also take the chance to deal with the issue of overpaying workers.

“The common wage at Alphabet in 2021 was nearly $300,000, and the typical wage is way larger. The competitors for expertise within the tech business has been considerably diminished, which has allowed Alphabet to considerably scale back remuneration per worker,” he stated.

Particularly, Alphabet ought to restrict inventory compensation given the low share worth, Hong added.

Over the previous 5 years, Alphabet has greater than doubled its headcount, including over 100,000 workers, of which over 30,000 had been added within the first 9 months of 2022 alone.

Pichai stated final week that he “deeply regrets” the minimize of about 12,000 jobs within the workforce and took “full duty for the selections that introduced us right here.”

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