Christopher Hohn wants Alphabet to lay off 20% of its employees and cut employee salaries

On Friday, Pichai announced that the “difficult decision” had been made to cut around 12,000 jobs — or 6% of the company’s global workforce.

In a Jan. 20 letter, Christopher Hohn — who revealed late last year that his hedge fund held a $6 billion stake in Google’s parent company — wrote to Pichai to urge the tech giant to go big on the job cuts to take further.

Founded by Hohn in 2003, TCI Fund Management used to have current UK Prime Minister Rishi Sunak on its staff and was named the world’s top performing large hedge fund in 2019.

While Hohn said, “Be encouraged to see that [the company is] taking action to get its cost base in order,” he insisted Alphabet had to lay off many more employees than the stated 12,000.

According to Hohn’s letter, Alphabet has more than doubled its headcount over the past five years, adding more than 30,000 employees in the first nine months of 2022 alone.

“The decision to cut 12,000 jobs is a step in the right direction, but does not reverse the very strong headcount growth of 2022,” he argued.

“I believe management should aim to reduce headcount to around 150,000, which is what Alphabet’s headcount will be at the end of 2021. This would require total employment in the order of 20%.”

A spokesperson for Alphabet was not immediately available when contacted by wealth.

cut staff salaries

In addition to driving down operating costs through mass layoffs, Hohn suggested Alphabet look at employee compensation packages as another area the company could use to reduce spending.

“The median salary at Alphabet in 2021 was nearly $300,000, and the median salary is much higher,” he said in his letter to Pichai.

“Competition for talent in the technology industry has decreased significantly, allowing Alphabet to significantly reduce per-employee compensation. In particular, given the depressed stock price, Alphabet should limit stock-based compensation.”

Alphabet, like many other big tech companies, experienced a stock price crash in 2022. Over the past 12 months, the stock has lost around 25% of its value.

Many large-cap companies in the industry have announced major layoffs in recent months, including Microsoft, Amazon, and Meta.

While he argues that Alphabet employees should be paid less, Hohn himself has seen his own income increase over the past year.

The founder and director of TCI Fund Management paid out nearly $690 million in dividends last year; the equivalent of nearly $1.9 million a day.

The payout is believed to be the highest annual amount ever paid to a single person in the UK. It’s more than 15,000 times the UK median salary of £33,280 ($40,585) and broke Hohn’s own record, set when he paid himself $479 million last year.

What is Christopher Hohn’s Net Worth?

After BloombergHohn has a net worth of approximately $7.5 billion.

He is also one of the UK’s most prominent philanthropists, giving US$386 million in 2019 through his charity, the Children’s Investment Fund Foundation.

One of his main philanthropic endeavors is funding efforts to alleviate the climate crisis, which he has made a central pillar of both his charity and hedge fund.

In the past he has publicly called for companies to be penalized for not making climate claims, and TCI has threatened to divest its stakes in companies that do not have strategies to reduce emissions.

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