wow. the hubris and inhumanity. How can someone who isn't running the company day-to-day purport to know exactly what staffing levels ought to be. Also why is a billionaire begrudging people for making 300k/ year. wow
hopefully this letter is fake
hopefully this letter is fake
The letter is published on TCI's own website[0].
He is salty about his winning streak ending[1]:
> Billionaire Chris Hohn’s 13-Year Winning Streak at TCI Ends With Fund Slumping 18%. Sell off in equities hurt bets such as Alphabet and Microsoft. Last year’s loss was the second since the fund started in 2004.
He moaned about cost reduction to Sundar Pichai in Nov 2022 too[2]. I wonder whether these sentiments were echo'd by other such investors too and how much all that contributed to Google's recent layoffs[3].
His fund has done activist moves in the past too so this sort of advocating isn't new to them[4]:
> In 2008 the US railroad company CSX won a court case against the Children’s Investment Fund and 3G Capital Partners, another hedge fund, after the funds announced that they had acquired about 20% of CSX’s stock.[9] TCI succeeded in electing four of its five directors to the CSX board, but CSX shares declined by about 50 percent after the meeting. TCI declared defeat and sold its shares, taking its directors off the board. Chris Hohn, the founder of TCI vowed to abandon shareholder activism as an investing strategy.
Apparently he hasn't exactly abandoned it.
[0]: https://www.tcifund.com/CorporateEngagements/Alphabet
[1]: https://www.bloomberg.com/news/articles/2023-01-20/hedge-fun...
[2]: https://www.tcifund.com/files/corporateengageement/alphabet/...
[3]: https://blog.google/inside-google/message-ceo/january-update...
[4]: https://en.wikipedia.org/wiki/The_Children%27s_Investment_Fu...
Makes for nice clickbait though, I guess.
https://www.cnbc.com/2022/11/15/alphabet-must-cut-headcount-...
>TCI’s stake represents 0.27% of outstanding Alphabet shares, according to Factset data, a position that the hedge fund has steadily accumulated since 2017.
>However, the company has three classes of shares, and co-founders Larry Page and Sergey Brin still have solid voting control thanks to their nearly exclusive ownership of Class B shares, according to the firm’s 2022 proxy report. That makes an activist takeover effectively impossible.
It's a business, not a charity. They have absolutely no obligation to keep tens of thousands of overpaid people on their payroll. It's not like we're talking about abused minimum-wage workers with no alternatives here either. And they're getting some pretty big severance packages, too.
I feel bad for the people on work visas, but that's a problem with the American immigration system, not Alphabet, and would apply anyone working at any company that needs to lay off people.
Should keep this in mind next time a corp asks for a bailout, taxbreaks, or has major court case against them. Then it suddenly becomes all about understanding their situation and protecting valuable business
Capitalism for mee but not for thee.
If Google had even 10% of the resources working on lobbying the US to fix the immigration system as it did lobbying the US to not antitrust it to death, I would buy this.
The "of course businesses need to be ruthless sociopathic monsters that care only about profit for investors, even at the expense of their employees and customers" is a choice that society made. IMO, an ethical system would have employers really consider themselves obliged to their employees.
At the very least, if we want to go in this direction then we need to retire the term "job creator" from our lexicon permanently. Employers can't get credit for being oh so generous in granting jobs when the response to cutting jobs is "well what did you expect, your employer hates you."
I’m not sure why you think they were overpaid. Surely a lot of these people delivered value well above and beyond their salary for Alphabet, who required them to live in a very high COL area. A 300k salary in the Bay Area, unfortunately just gives you enough to live an okay life. It’s not like 300k in Alabama where you can live like royalty because of the depressed area.
Your perspective seems to be an internalization of extreme capitalism that only benefits the capitalist class. The workers, be they middle or low income, do not share this sentiment. Most other advanced nations do not allow this type of worker exploitation.
Why shouldn’t they have an obligation to keep employees on their payroll? They’re not in danger of going out of business. In fact, they’re wildly profitably. So, there is no need to make these cuts, only a desire to. The company made the mistake, but now society will have to pick up the tab, not the company managers and investors who ultimately made the decision to hire those people in the first place.
And really, your perspective on Bay Area salaries is detached from reality. Yes it’s expensive, but there are people there who survive on below minimum wage, under the table jobs. Make friends with your janitor or something and get some perspective.
The rest of the country is starting to hate tech workers, and takes like this are why.
The rest of the country is myopic, then. Workers should strive towards better wages, instead of celebrating layoffs.
It doesn't make any sense to hate engineers who can afford what most families did in the 50s and 60s, on a single paycheck.
What you’re describing is someone who’s living in the margins of society. Committing tax evasion just to survive while still living in poverty with multiple roommates just to get by is not what I would consider an okay life. This person will have no hope of retiring, so they’ll work until they die, which will be early because they won’t have access to quality healthcare in our expensive, privatized healthcare system. That’s certainly not a life I want to live, and I doubt you would want that either.
> Things cost less and businesses produce more when they’re run efficiently.
If you take a narrow perspective where the only thing you want to maximize is economic output, that’s true. But what we see in American society is that this comes with antisocial trade-offs. Wealth inequality has skyrocketed, health outcomes have plummeted, homelessness is a plague. I think there should be a balance. Yes, we want effective and efficient businesses, but we need to balance it with overall benefits to society and that’s not happening in America.
Who says they are "overpaid"?
It always baffles me how worker solidarity ends at the slightest sign of someone making good money.
In a full blown recession going back to the headcount of 2 years ago isn’t exactly some Gordon gecko capitalist evil. It’s pretty reasonable.
Especially as it seems most tech companies are culling admin and hr staff, which is not where value is being created.
Not to mention the insane benefits these employees get, these are the best employers in the world. It’s clear employee happiness was much more important during good times than any investor sentiment. Investors just shut up as the business was still growing.
Investors are a rule are smart enough to realize that they - by virtue of being 'passive' - allow people that know more about the business to run it. Back seat drivers are hardly ever welcome as investors, if you're that good you should go and run another company, surely that's a better use of your talent then than to try to run a diversified fund.
With AI, capital will dominate everything. Crass inequality will be the norm. The only path out of this will be paved with blood. Except if humanity is much smarter than I think it is.
FWIW I don't think that it is pointless to talk about the effect that billionaires are having on our lives precisely because their billions insulate them from the consequences which effectively makes them our new kings with their own dynasty. And the kings of old were at least somewhat accountable to their population in times of hardship and their influence was limited to the countries that they governed (or decided to go to war with).
I sincerely believe that if we don't find a way to reign this in that it will come back to haunt us.
Perhaps this is a good thing. You can’t make emotional decisions when you are responsible for millions of people potentially. You literally wouldn’t be able to have leaders if leaders were emotionally involved in tens of thousands of peoples hard lives.
What is your blueprint for achieving this practically, instead of saying nice sounding dreams?
You asked for an example, I gave you one.
Have a read to see how Switzerland created their political system out of necessity:
As for me being naive: I am pretty realistic in my expectations but I do believe that the achilles heel of these characters is exposed: their wealth stems from a bug in capitalism that allows the unfettered collection of money, power, influence once you achieve a certain base. The fact that we don't have a way to effectively tax transnational entities is something that is absolutely fixable, and we currently do not have rules for that. Changing the game entirely is throwing the baby away with the bathwater, taking care of < 500 individuals in such a way that their tricks are no longer going to cause the upheaval of the lives of 100's of thousands of others is definitely something I would be happy to see implemented.
The game needs to be changed entirely, and we need to talk about how. Communism didn't work, capitalism does not work anymore, and the topic you'd like to discuss is really just a logical consequence of raw capitalism. I understand that capitalism was probably good to you in particular, so you are not interested in changing the game, just fixing it here and there, but that is pointless, as I already said.
My empathy with overpaid Googlers is also quite limited. Maybe they can now do something useful with their lives. I don't think Google's website works better than 15 years ago, so what are all these people doing?
Capitalism, like democracy is broken, but it is the best we've got - so far. Replacing it outright with some new system that somehow magically overcomes all of the shortcomings of the old and does not introduce new ones is a pipe dream, but you can make moves to fix the biggest holes and then keep doing that until you have incrementally arrived at a much better solution.
As for my empathy with overpaid Googlers: given the choice to sympathize with them or with their nil contributing rent seeking shareholder billionaire overlord I will side with them, and given the choice between them and a homeless person, inmate or mentally ill person my sympathy will be with the latter. Dealing in absolutes will get you quite literally nowhere, it's tilting at windmills at best and a distraction at worst. But feel free to pursue your goals in your way and leave me to do the same in mine.
There isn't a hard choice between these and no reason why we can't both pursue our goals in different ways and end up in a better place. It increases the chances of positive change.
I understand the follow up argument about a majority of people might not hold ownership in any public company at all, but that feels like a separate topic.
I am confused - are you saying did google management made an incompetent decision to hire them and now firing them is the rifgt decision?
Of decision 1 was incompetent, why do you believe decision 2, by same management, is competent? What if they fire all the wrong people? What if you need to fire the management? Has anyone even checked if management needs to be fired?
You think they took a $6B position without chatting with the company about it?
Not always (like in a hostile takeover), but if you think TCI just punches “$5,000,000,000 of GOOG” into their trading platform you’re wrong.