Activist Hohn tells Google to cut its 187,000-strong workforce
BILLIONAIRE hedge fund manager Sir Christopher Hohn has called on Google to drastically slash its 187,000 headcount amid a surge in redundancies across Silicon Valley.
Activist fund The Children’s Investment Fund Management (TCI), which owns £5bn in stock in Google parent company Alphabet, wrote to Sundar Pichai, Google’s chief executive, demanding “aggressive action” to reduce spending.
TCI, which has £25bn in assets under management, employed Rishi Sunak between 2006 and 2009.
In the letter, the TCI founder wrote that the fund believed Alphabet could be operated with “significantly fewer employees”, and cited a statement from Mr Pichai that Google could be “20pc more efficient”. “We could not agree more,” he wrote.
Silicon Valley companies have come under pressure to cut jobs amid concerns from investors that they have spent lavishly and grown too fast. After booming during the pandemic and hiring rapidly, growth at big tech businesses has slowed amid a downturn in digital advertising spending.
In October, Brad Gerstner, of activist fund Altimeter Capital, wrote to Meta boss Mark Zuckerberg urging him to cut the headcount at the Facebook owner by 20pc, saying: “It is a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people.”
Last week, Mr Zuckerberg announced that Meta would cut 13pc of staff, around 11,000 people.
Alphabet shares are down 31pc this year, but rose 3.5pc in trading in New York yesterday. TCI has previously launched activist campaigns against German stock exchange Deutsche Boerse and Dutch bank ABN Amro.
The fund also called for cuts in Google’s “Other Bets” division, which includes its Waymo driverless cars division. Sir Christopher wrote: “Unfortunately, enthusiasm for self-driving cars has collapsed. Waymo has not justified its excessive investment and its losses should be dramatically reduced.”
Sir Christopher originally launched his hedge fund in 2003, linking the fund’s investments to a charitable foundation, the Children’s Investment Fund Foundation. As of 2022, the foundation has an endowment of £5bn.