“We agree with Altimeter Capital ...‘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,'” an activist investor wrote.
Google parent Alphabet Inc. must “take aggressive action” to cut costs, according to an activist investor.
“Our conversations with former executives of Alphabet suggest that the business could be operated more effectively with significantly fewer employees,” Hohn wrote. “We agree with Altimeter Capital’s Brad Gerstner, who wrote: ‘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.'”Hohn noted that Meta Platforms Inc. META, +2.
“Alphabet’s headcount has increased at an annual rate of 20% since 2017,” he wrote. “It has more than doubled since 2017. This growth is excessive, both in relation to historic headcount growth and what the business requires.” Hohn also argued that Alphabet’s employee compensation is lofty, citing an S&P Global analysis that found Alphabet’s median compensation was 67% higher than at Microsoft and 153% higher than at the largest 20 public tech companies in the U.S.
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