‘Decision to cut 12,000 jobs step in right direction’: Investor tells Google
2 min read . Updated: 24 Jan 2023, 07:13 PM IST
PremiumHe said that the management should ‘aim to reduce headcount to around 150,000.’
Alphabet Inc, the parent of Google recently announced 12,000 job cuts, more than 6% of its global workforce, becoming the latest tech giant to retrench after years of abundant growth and hiring. In a viral tweet, a letter by Christopher Hohn, hedge fund billionaire, said that layoff is a step in the right direction.
"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 management will have to go further," he said in the letter.
He said that over last 5 years, Alphabet has more than doubled its headcount. He said that the management should ‘aim to reduce headcount to around 150,000.’
"I believe that 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 order of 20%," he said.
He also said that Google should "address excessive employee compensation". He further warned that the company should moderate stock-based payments.
The letter was tweeted Stephen Denman. "This is why tech companies are laying off. Nothing to do with recession. Just shareholder greed Man who paid himself a half billion pound salary last year complaining to Google CEO that 12000 layoffs isn’t enough," he tweeted.
The tweet has garnered 124 likes and 70 retweets.
"Sadly, there is no ethics in how laws deal with this. If a company has to go through layoffs, it should prove it is either making a loss or - when there is an operational justification - surrendering paying dividends to prevent unfair gain from this," said a user.
“These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities," Pichai wrote in an email.
He said the company has a “substantial opportunity in front of us" with artificial intelligence, a key investment area where Google is facing a surge in recent competition.
“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI," the Alphabet CEO said.