Activist Investors Slam Google in Open Letter Demanding Headcount Reductions

Google’s parent company Alphabet Inc. needs to take “aggressive action” to reduce costs and cut down its headcount according to activist investor TCI Fund Management.

Bloomberg reports that Google needs to quickly and aggressively reduce expenses and scale back its headcount according to investor TCI Fund Management. The fund outlined these requirements in a letter to the tech giant encouraging the company to begin making tough choices as job cuts continue throughout the entire tech industry.

TCI Managing Director Chris Hohn wrote Tuesday in an open letter to Google CEO Sundar Pichai that management should be publicly setting a target for profit margins, increasing share buybacks, and reducing losses in its portfolio of “Other Bets.”

Hohn said: “We are writing to express our view that the cost base of Alphabet is too high and that management needs to take aggressive action. The company has too many employees and the cost per employee is too high.”

Company shares jumped as much as 4.6 percent to $100.14 after TCI posted the letter. This year, Alphabet’s stock has fallen by 34 percent. A slowdown in digital advertising has had a negative effect on the company’s ads business, with Alphabet reporting third-quarter earnings and revenue that missed projections in October.

Job cuts have affected the entire tech industry with Facebook, Twitter, and Amazon all announcing the layoffs of hundreds or in some cases thousands of employees. Google has yet to implement any major layoffs although the company has said that it was slowing the hiring of new employees.

TCI noted that Alphabet’s employee count has grown by 20 percent per year since 2017, noting that: “This growth is excessive, both in relation to historic headcount growth and what the business requires.”

Read more at Bloomberg here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan