Activist hedge fund TCI Fund Management called on Google parent Alphabet to aggressively cut costs and reduce losses in long-term bets such as the self-driving car unit Waymo, claiming the company would be more efficient with fewer employees.

London-based TCI, which said it owned shares worth more than $6bn in Alphabet, made the requests in a letter to chief executive Sundar Pichai on 15 November, writing that it has been a significant shareholder since 2017.

“We are writing to express our view that the cost base of Alphabet is too high and management needs to take aggressive action,” TCI wrote in the letter, signed by managing director Christopher Hohn. “The company has too many employees and the cost per employee is too high.”

Alphabet didn’t immediately respond to a request for comment.

It is rare for big technology companies to face campaigns from activists such as TCI. Alphabet and others have made large profits while buying back billions of dollars in shares in recent years as interest rates remained low in the developed world.

But steep layoffs have been rippling across Silicon Valley in recent weeks, with Twitter under new owner Elon Musk and Facebook parent Meta Platforms each cutting thousands of jobs. joined the trend on 14 November, when The Wall Street Journal and other outlets reported it is planning layoffs affecting as many as 10,000 employees.

Meta came under pressure last month from the investment firm Altimeter Capital, which wrote in an open letter that CEO Mark Zuckerberg needed to take drastic steps to streamline the company.

TCI held conversations with former Google executives who suggested the company could be operated more effectively with significantly fewer employees, it said in the letter. Alphabet’s head count has more than doubled since 2017, it wrote.

“You have publicly stated that Google should be 20% more efficient. We could not agree more,” TCI said in the letter.

TCI also asked Alphabet to begin disclosing profit margin targets for the company’s Google Services segment, which includes the core search business. It said a reasonable target would be at least 40%.

TCI’s Hohn is a prominent investor who has made a name taking on some of the world’s biggest companies, usually in service of higher returns for shareholders but also for social causes. Last year he launched a campaign to force dozens of the world’s largest companies, including Alphabet, to publish carbon-emission reduction plans and put them up for shareholder vote.

Alphabet shares were 4.4% higher in midday trading.

Write to Miles Kruppa at

This article was published by The Wall Street Journal, part of Dow Jones

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