Activist investor TCI Fund Management on Tuesday called on Alphabet to cut costs and take aggressive action, saying the Google parent has too many employees and should increase share buybacks.
“The company has too many employees and cost per employee is too high,” the hedge fund said in a letter to Alphabet Chief Executive Officer Sundar Pichai.
Alphabet, whose shares rose 3%, did not immediately respond to a Reuters request for comment.
The fund, an Alphabet investor since 2017, said the company should also disclose its operating profit margin targets and reduce losses in Other Bets, the unit that includes Waymo and other special projects.
TCI said Alphabet pays some of the highest salaries in Silicon Valley and the growth in headcount was “excessive,” noting that the company has increased it at an annual rate of 20% since 2017 and has more than doubled it since then.
“Cost discipline is now required as revenue growth is slowing. Cost growth above revenue growth is a sign of poor financial discipline,” the fund said in the letter.
TCI said it currently owns shares valued at more than $6 billion.