Investor tells Google: Cut costs now and stop paying staff so much

Activist investor TCI Fund Management is calling on Google's parent Alphabet to pursue aggressive cost cutting on the back of a hiring spree during the pandemic, claiming the business could be more efficiently run. The UK-based hedge fund first bought Alphabet stock in 2017 and currently has shares valued at more than $6 …

[Pascal Monett]

"not labor intensive"

If that is your criteria then you should invest in farms.

This bollocks was certainly written by a highly-paid administrative busybody that has never had an idea or solved a problem in his life.

You want Google to be run like Amazon ? Go invest in Amazon.

[Wellyboot]

Re: "not labor intensive"

Yes, indulging in 20-20 hindsight doesn't work when running a company like this, being first* often matters.

* or a very close second with a prettier product.

[Martin Summers]

Re: "not labor intensive"

Indeed. As soon as they let an activist investor call the shots to milk the profit, Alphabet will look like it's been dragged through a hedge fund backwards.

[aerogems]

Re: "not labor intensive"

You've never been on a farm, have you? I get what you were trying to say, but even with all the modern advancements, farming is still pretty labor intensive. If you want to be able to make a living at it you have to have a larger and larger farm these days. You can't just have 1-2 acers and sell your produce at the local market to be able to support yourself and a family.

[Michael Wojcik]

Re: "not labor intensive"

Though I have no love for Alphabet, I agree. Ignore "activist investors" as much as possible.

That said, of course this sort of "milk investments for short-term profit" is explicitly what this sort of investor exists to do. Whoever wrote this letter is just doing his job. It may be an obnoxious job, but that doesn't mean the author is a fool – just a professional raider.

[I ain't Spartacus]

Re: "not labor intensive"

I court the downvotes here. But doesn't this report have a point?

Google still make about 90% of their profit from putting adverts next to search. A market they've totally dominated for 15 years now.

They make an OK amount of money from Android, and the marketplace. Though nothing close to Apple or Samsung. But it was still an important investment, because they needed a strong position in mobile to protect their search engine monopoly. And also having billions of data collectors (phones) around the world gives them vast amounts of information that improve search, maps etc.

I'm sure they make something from G-Suite and cloud computing.

But they've invested tens of billions over the years, probably hundreds of billions now, into various other ideas and side projects, and not got much in the way of products out of it. Waymo has some clever technology and might be the future of self-driving cars. If self-driving cars can ever be used in anything other than very limited circumstances and if Google can capture a good part of that market - which are two big "ifs".

Given Google's lack of success in the last ten years at making money from side projects. And its many failures in hardware and consumer tech, perhaps management would be better being more focused - rather than having fun playing at tech investing with other peoples' (their shareholders') money? That's the thing about doing an IPO and getting rich. You've sold your company. It's no longer your personal trainset, that you get to play with however you like. You've sold it, even if you're still being allowed to run it. Unless you can pull of the trick Zuckerberg has, where his special shares still get to outvote everyone elses', even though they've put in billions to buy them and he doesn't own anything close to a majority.

Maybe they'll come up with something brilliant. Or even several somethings. But so far, their track record is that they're brilliant at monetising search and the rest of the time they're more a company that develops interesting technology, waits a few years with it in beta, and then abandons it.

[mistersaxon]

Re: "not labor intensive"

They want Google to turn out like IBM. If they can’t see why that’s a bad idea it’s because the view is very limited when your head is up your own back passage.

IBM stock buybacks, sell-off of every possible subsidiary, lack of investment in R&D, short-sighted M&A policy* and their attempts to prune back employee wages and benefits, plus layoffs have all proven that driving down the “bottom line” in an attempt to increase dividend income (NOT share price) is a self-limiting plan as it affects the top line just as much as the bottom, possibly more so.

*still think they should have bought Sun instead of letting a major competitor have it.

[Wellyboot]

Too many paid too much

Says (very) minority stock holder, did they buy a year ago at peak?

oh dear, how sad, never mind.

[Charlie Clark]

Re: Too many paid too much

No, they bought in 2017 and have seen a considerable increase in their stake.

Does Google get everything right? Certainly not but the reorganisation into Google + other bets did provide some transparency. $ 20 billion loss over 5 years is a lot but compares favourably with, say, Uber. And the investments in things like Waymo aren't supposed to generate short term profitability. TCI might think there's no future in autonomous vehicles but, in that case, I suggest they don't fly in any modern aircraft. Autonomous cars are not easy but significant progress has been made in the last decade.

FWIW I don't work for Google or have any share and there's a lot of things the company does that I don't like. But, credit where credit's due for a Silicon Valley company.

[Peter2]

Re: Too many paid too much

TCI might think there's no future in autonomous vehicles but, in that case, I suggest they don't fly in any modern aircraft. Autonomous cars are not easy but significant progress has been made in the last decade.

I don't think there is any real future in autonomous vehicles. The pinnacle of their usefulness should be lane keeping cruise control on a motorway and anything else should be banned until it actually works.

Aircraft are a whole different kettle of fish. Aircraft fly in straight lines in the sky where (assuming you select an appropriate altitude above ground allowing for mountains etc) on a flight path clear of other aircraft then it's effectively impossible to hit anything on a practical level. And if an aircraft on autopilot does depart the designated flightpath then an irate air traffic controller will ask the aircraft to fly the right path, or get everybody else to move around it while writing the pilot up for losing their license.

Put it this way; How many aviation autopilot errors result in deaths that weren't as a result of human error (eg programming the aircraft to to fly from A to B at 10,000ft without realising that there was an 11,000 ft mountain between A & B).

Autonomous cars are not easy but significant progress has been made in the last decade.

Which is good. But the "significant progress" should be made in a lab, and in controlled tests on designated testing grounds.

They shouldn't really have an attitude that says "that works some of the time; let's deploy it live to cars on the road". I know that I might get killed by a human driver who's either incompetent, or just having a bad day. It's unlikely, because they usually manage to take themselves out by ramming trees etc. They generally receive a summary punishment via the laws of physics, and if they survive then occasionally by the law of the land and most human drivers accept that result.

The people deploying unsafe "self driving cars" that have performances below that expected of a learner driver (Tesla's ramming stationary police/fire vehicles in a road complete with sirens and flashing lights; we're looking at you) appear to get away with this with zero consequences, and then blame the driver for the accident. Unsurprisingly, this does impact on the willingness of meatbags at risk of being mown down by them somewhat to share the public roads that we pay for out of our taxes with them.

Especially since if driverless vehicles actually worked then they would be a benefit for the richest 1% of society who already skip their obligations to pay tax required to maintain infrastructure, and they would like to avoid paying their drivers too via automation, imposing yet more misery on the bottom paid workers acting as taxi drivers, delivery drivers etc.

[Anonymous Coward]

Re: Too many paid too much

Seems to me like your statements about the dangers to humans are matter of execution, not of whether real world testing can be done at all - a conclusion based on real world results. Some driverless ventures have very good safety records.

I do think that a 1:1 passenger:vehicle ratio is the wrong target, so maybe agree on that. Somewhere between 5-10 passenger vehicles, with room for some shopping goods, somewhere on the boundary between taxis and buses would be more practical. There are a lot of residential areas between very dense cities and very sparse rural areas where currently a car is indispensable - buses are too infrequent and taxis are too expensive - a reliable low latency driverless taxi/bus could be very economical. If the latency (waiting time) were low enough a car would not be a requirement. It's a chicken and egg problem though.

Why are western un/semi skilled workers condemned mostly to service jobs? It's because anything requiring labor is imported from abroad, mostly from China it seems. Of course there are fewer such workers available in the West - but that would be motivation to develop automation to make up the difference.

Which brings the discussion back to Google future ventures - smart automation for manufacturing is an area they could potentially excel in, leveraging their AI skills.

[Fizban64]

Re: Too many paid too much

Seems like there is a movement in China with it's younger workers actually not doing this stressful work anymore.

https://internationalbanker.com/finance/record-youth-unemployment-in-china-weighs-heavily-on-graduates-job-aspirations/

is a good read.

[MachDiamond]

Re: Too many paid too much

"Somewhere between 5-10 passenger vehicles, with room for some shopping goods, somewhere on the boundary between taxis and buses would be more practical."

There's PRT (Personal Rapid Transit), but it's a built system just like a tram/trolley so there has to be enough used along it's route for it to make sense. One application I can see is instead of trollybots delivering groceries door to door, a larger system delivers to a depot where people meet it to pick up their orders. For an extra fee one might be able to have their bags put in a locker for pickup later. It reduces the number of trips people in a neighborhood make. I live in a small town with some good neighbors so very often if one of us is going to the lumber store 30 miles away, they'll ask if anybody needs anything while they are there (a good reason to have cash around). With petrol prices going through the roof, I put off projects if I only need a few screws rather than going to the hardware store for only a couple of things.

The idea I use is like our blood system. As transportation moves away from the major hubs, the vehicles get smaller and less expensive. I could drive to a PRT station and take one to a train station to get to a bigger town where I would transfer again to a PRT pod to the closest I could get to my final destination. If I need a taxi from that point or only an eBike, it would be handy if one was available. Ultraglobalprt's website has some very nice stuff to look at. I believe the company is actually closed after the death of their founder. I know their chief engineer is off doing other things now.

[PM from Hell]

Re: Too many paid too much

Unfortunately I don't think I'd get 2 full grown muddy labs in a PRT pod, and as yet neither one has mastered riding a bicycle.

[MachDiamond]

Re: Too many paid too much

"Unfortunately I don't think I'd get 2 full grown muddy labs in a PRT pod, and as yet neither one has mastered riding a bicycle."

The UltraPRT pods can take 4 people seated and two in wheelchairs at once. Brining a bike on board with a pair of muddy labs is possible, but if they catch you, they might want to stick you with a cleaning charge if the dogs shake mud all over the interior. Part of the design brief was easy cleaning. The pods can be put on a slight tilt at a depot and housed out if needed.

[PM from Hell]

Re: Too many paid too much

I live in a rural village, there is a bus to the nearest town 1-2 times per day, we have 2 Labradors who we drive to a local park or exercise field most days, We drive estate cars with a significant amount of dog gear in the back for walks, balls, leads, first aid kit, towels. our walking boots waterproof coats etc. all this stuff takes up space and having to load it into a different 'shared transport' every day would be a major pain. The first aid kit is there from bitter experience and there is always the risk that a walk will need to be cut short so a dog can be patched up or even taken to the vets.

In addition I have dog guards in the cars, rubber boot mat's to protect the car and yet the tailgate section is still covered in mud this time of year. I also have to wonder how many people would want to share a journey with 2 over excited Labradors and their owners carrying rucksacks full of doggy gear on the way out and the either very wet or muddy owners and dogs on the way back, I also have cars with leather seats so they are wipe clean by the way.

We feed the dogs on raw food which we buy froze, do you want to travel on a hot day beside a guy with 30 rolls of slowly defrosting animal food?

The nearest supermarket is 7 miles away as well and whilst we do have shopping delivered we also do need to do grocery shops at times.

I've not even talked about the impossibility of using public transport to get to work, a 20 mile, 35 minute journey becomes a 2 hour one on the bus, starting off with a 5 mile journey in the wrong direction and with the return journey needing to be started by 4:30 pm for the last bus home. I've tried car sharing but the people looking to share were so far off my journey route or travel timetable that I never found any matches which don't significantly increase the journey distance and time.

[M.V. Lipvig]

Re: Too many paid too much

Dunno, how many died due to the 737 MAX autopilot fails? But, your point is well taken. Aircraft autopilots are far easier to design and operate than ground vehicle autopilots. But even then, those aircraft must be controlled by qualified pilots. Ground car autopilots like what they're pushing probably won't be ready for another 50 years.

[Peter2]

Re: Too many paid too much

Dunno, how many died due to the 737 MAX autopilot fails?

That wasn't actually the autopilot; that was Boeing deciding that the aircraft equivalent of the steering wheel should accept inputs not from the pilot that they couldn't override and didn't document this anywhere to avoid doing the required risk assessments etc.

If it was the autopilot it wouldn't actually have been that bad; the pilot yanking back the stick would have disengaged the autopilot and that would have been the end of the problem.

[Charlie Clark]

Re: Too many paid too much

My understanding is that there have been no injuries associated with Waymo vehicle. This is due in no small amount to the practice of defensive driving: if in doubt, stop. As locational data is essential for the things to work properly, they must be driven in real places in real conditions (topography, lighting, unknown objects, unpredicted movements, etc.). This should be under supervision for as long as it takes.

The market going forward for vehicles will be dominated by a leasing or taxi model as this is a more efficient use of capital, especially when meatware is no longer required.

[MachDiamond]

Re: Too many paid too much

"My understanding is that there have been no injuries associated with Waymo vehicle."

They cheat a bit. The cars have a hyperaccurate survey on board and will only travel to places on the internal maps. All of the streets have been scanned over and over and over again to build up a picture of what is more or less permanent. Anything that isn't in permanence is processed for recognition. GPS is only used as a first approximation and a double check. The car's brains know within a very tight tolerance where they are. I am guessing that they calibrate the cars frequently so things like tyre wear don't throw things off.

[MachDiamond]

Re: Too many paid too much

"Put it this way; How many aviation autopilot errors result in deaths that weren't as a result of human error (eg programming the aircraft to to fly from A to B at 10,000ft without realising that there was an 11,000 ft mountain between A & B)."

Pilots don't often get to plan altitudes for an IFR flight. They can submit a plan that keeps them out of severe weather on longer trips and out of trying to push the jet stream out of the way rather than it helping them, but final routing is approved by ATC. The "flight levels" start at 18,000' which is clear of most mountains and the few that are higher should be well known to pilots, they're very picturesque when at cruising heights.

IFR routing is also kept within flight lanes similar to a car with an added dimension. Pilots program in discrete points in space to navigate to and the plane follows that course unless ATC tells them they can cut a corner, speed up/down or need to change altitude. This gives an aircraft 3 supervisors, the pilot, the flight computer (FMC) and air traffic control. There is something of a fourth with ADS-B which broadcasts a plane's position and identification based on GPS. An aircraft being 3m out of position isn't going to affect anything. 3m in a car is in the other lane or on the pavements. 3m chosen as it's often the CEP of GPS without using differential inputs.

[DS999]

The real problem with 'other bets'

Is that nothing there has become successful enough to be moved out and part of the larger company. That's supposed to be an incubator for high investment loss making business lines that are being developed until they become profitable. Why is Nest still in there? If it isn't profitable now, it never will be. They ought to sell it off if they can't make it work well enough to promote to main Alphabet. Maybe a more consumer hardware focused company could make it work...like say Samsung or Netgear?

Comparison to Uber is rather specious too because Uber is mainly a taxi company with a self driving effort on the side. Waymo is just the self driving effort, without the huge loss making taxi operation[*]

So I think he might be onto something with his criticism of 'other bets'. The salary thing may be because they offer stock based compensation too widely, or the time period being compared to had a large runup in Google's stock price so the awards were much higher than they will be in the future.

[*apparently Uber's goal is to undercut traditional taxi companies until they all go bankrupt, and when Uber (and maybe Lyft) is the only alternative left they can raise prices and become profitable]

[Michael Wojcik]

Re: The real problem with 'other bets'

If I were Alphabet I'd be looking to unload Nest. Sooner or later the Amazon juggernaut will roll over most of the other players in the "smart home"¹ space. Amazon want to control as much of home-automation technology as they possibly can, and they're quite prepared to cross-sell and predatory-price until they do.

¹Not that I think it is, mind. I wouldn't put an Internet-connected thermostat in my home if you paid me to.

[DS999]

Re: The real problem with 'other bets'

I wouldn't put an Internet-connected thermostat in my home if you paid me to

Neither would I, but that won't stop that sort of gear from becoming ubiquitous. My girlfriend just bought a new house and has a Ring doorbell and an outdoor floodlight/camera to install. Wouldn't be surprised if she has an Alexa somewhere she hasn't unpacked.

I could try and tell her why I think that's a bad idea, but there's no point. At best it would sound like I'm telling her she spent her money foolishly, at worst that she's stupid. If she ever asks my opinion (perhaps after reading something about their issues, or wondering why I don't have smart home stuff despite working in IT) I'll give her my two cents, but a harmonious relationship is more important.

[Brewster's Angle Grinder]

..."some of the most talented and brightest computer scientists and engineers" but claimed this is just a "fraction" of the total workforce and those in general sale, marketing and admin functions should be paid in line with other tech businesses.

About how many failed tech companies could you say, "great product, but nobody bought it"? And about how many successful companies can you say, "shit product - it was just hype and marketing"?^*

You don't just need engineers. You need marketing and good admin. And you get the best bees with the sweetest nectar. If you want to be best of class, you need to be best of class in all flowerbeds. (Nor do you want the talent going to your competitors.) It all smacks of short-termism and lack of understanding.

Declaration of interests: I'm principally a coder and have zero affiliation with Google.

^{* Maybe Google falls into this camp. Discuss.}

[F. Frederick Skitty]

Yeah, maximise short term profit for a quick investor return and screw the long term prospects of the business. So glad I work for a privately owned company where they actually care about fixing technical debt and having the resources to compete.

[VoiceOfTruth]

TCI Fund Management

I bet they don't look at their own company that way. Perhaps TCI could cut its own costs. It is located right in the heart of Mayfair, one of the most expensive places in London. Why not move to a nasty office building in, say, Basingstoke? Then they can eat sandwiches from the travelling sandwich man rather than expensive lunches at expensive restaurants in Mayfair.

Let me rewrite the headline for you: Greedy money grabbing people want more money.

[Joe W]

Re: TCI Fund Management

Ah, yes, "activist investors". What an utter load of bollocks. The same kind of people who buy a company with its own money (or rather its own debts), so it is not your and your cronies' money that is at risk but only the future of the whole company you bought. Then drive it into ground, let it rake up more debt, flip it for a buck to some sucker, claim the loss on investment on your tax form.

[VoiceOfTruth]

Re: TCI Fund Management

-> The same kind of people who buy a company with its own money (or rather its own debts)

Those people are literally the worst scum of the earth. They saddle a company with debts which it cannot pay, but somehow walk off with loads of money themselves.

[Intractable Potsherd]

Re: TCI Fund Management

As the late, lamented Douglas Adams might have said - Activist investors: a bunch of jerks who'll be first against the wall when the revolution comes.

[MachDiamond]

Re: TCI Fund Management

"As the late, lamented Douglas Adams might have said - Activist investors: a bunch of jerks who'll be first against the wall when the revolution comes."

The activist investors and the complaints department of the Sirius Cybernetics Corporation are the only ones making a profit.

Share and Enjoy!

[steviebuk]

Re: TCI Fund Management

And if they were "activist investors" they'd not be buying Google. If you want to be an "activist investor" buy a charity and help that charity prosper.

[the Jim bloke]

Re: TCI Fund Management

Ah, yes, "activist investors"

a thousand years ago, they were turning up in longships, and sacking monasteries.

[DishonestQuill]

Re: TCI Fund Management

I must object to you slandering vikings by associating them with activist investors.

[Antipode77]

Re: TCI Fund Management

Why don't politicians make laws forbidding this kind of debt loading of company A when bought by company B.

It is practically an invitation to legalized robbery.

We also need to get rid of the erroneous notion, that the only stakeholders, that matter are shareholders.

[MachDiamond]

Re: TCI Fund Management

"Why don't politicians make laws forbidding this kind of debt loading of company A when bought by company B."

Those politicians own those companies or a decent chuck of stock, or the company donates healthy sums to their campaign funds. Foxes and henhouses all the way down.

[Adrian 4]

Re: TCI Fund Management

You'd have thought that if TCI were so knowledgeable about running a tech company they'd be doing that, rather than a coin-clipping business.

[Someone Else]

$Adrian 4 -- Re: TCI Fund Management

C'mon, man...Running an actual business that does something is hard work, well beyond the capability (and attention span) of these parasites.

[Terry 6]

Re: TCI Fund Management

Why not move to a nasty office building in, say, Basingstoke Bradford?.

Bloody sight (and site) cheaper. The local economy needs that income too.

Fat chance. Catch types like them straying beyond the stockbroker belt! Or anywhere too far for them to visit their kids at Eton.

[NeilPost]

Re: TCI Fund Management

Until HS2 Northern was cancelled that could have been a thing.

[Anonymous Coward]

Re: TCI Fund Management

Why don't TCI Fund Management tell us what all of their employees, including their Directors, make.

[VoiceOfTruth]

Re: TCI Fund Management

Or see what their "expense accounts" are like. See my point about expensive restaurants. Let them go to Burger King.

[NeilPost]

Re: TCI Fund Management

Maybe Google can give them a suite inside their Sideways Versailles Palace @ Waterloo…. which has escaped mention as being a waste of money??

An admin shed in Middlesborough would have sufficed.

[DrSunshine0104]

Re: TCI Fund Management

Self-reflection is never an option to these people. 'Someone else's fault' is their credo. Tightening of the belt is always someone else's duty.

[Anonymous Coward]

"UK-based hedge fund"

Let's just think about this.

UK based hedge fund advice: "cheapskate it on employee pay"

UK economy: notoriously underproductive through lack of investment in employee skills

I think I'm starting to see a connection here.

File this one in the recycling bin along with Rees-Moggery and Trussonomics.

God help us given Rishi Rich's pre-parliament career.

[EarthDog]

Let's turn it into a McCompany!

Let's race headlong for mediocrity in a downward death spiral like all those other tech companies (though it could be argued that Google+Alphabet is a marketing company that happens to produce tech as a side effect).

Take a one size fits all approach and let it become a McCompany with McJobs run by McManagers.

[NeilPost]

Re: Let's turn it into a McCompany!

Is that like Amazon is really a Cloud Hosting company …… that (really) likes The Lord of the Rings, is struggling to monetise the Farm to Fork ventures (Integrating Clarkson’s Farm into Morrison’s Supermarket Home Delivery @Amazon Prime) has a lot of warehouses selling Chinese tat, has thousands of Ford Transit vans (on sub-Lease) badly driven/parked by the exclusively Polish People, could have treated Frances McDormand better, and has a dumb annoying wife called Alexa?

[Dinanziame]

Indeed clearly Google is doing it wrong

As can be observed by the fact it is a failing and unprofitable company. Oh wait.

[Anonymous Coward]

Re: Indeed clearly Google is doing it wrong

Google is dependent on advertising for a majority of it's profits, and it is correct to say that will decrease in the near future. In nearly every country, including the US, there are looming challenges as others clamor for bigger slices of the pie. That's not a tech problem, it is an economic-political problem. So, yeah, making a profit, but Google must adapt.

TCI doesn't offer any ideas for the future, only for the next quarterly dividends. That's not long term smart.

[Someone Else]

Re: Indeed clearly Google is doing it wrong

Since when has a hedge fund ever worried about "long term smart"?

[Michael Wojcik]

Re: Indeed clearly Google is doing it wrong

Exactly. The entire purpose of an organization like this is short-term extraction of value. It's a completely logical capitalist formation. We may dislike it (I certainly do), but it's not some sort of aberration; given the way public ownership of corporations works, of course some people are going to create parasitical organizations that seek to grab whatever cash they can quickly, rather than look to the future.

After all, Keynes' Maxim still applies: In the long run, we are all dead. If your job is maximizing profits for a group of people who are currently alive (and may not be for that many years), then planning for the future is untenable.

[MachDiamond]

Re: Indeed clearly Google is doing it wrong

"Google is dependent on advertising for a majority of it's profits"

Ahh, no. Google's main business is selling PII. Advertising might be in second place, but it's an also-ran in the grand scheme of things. Speaking of grand schemes, they've come up with all sorts of ways to fleece people of their money. Being the dominate search engine, what they serve up doesn't have to have any taint of being unbiased. If you aren't buying adwords, your site will never wind up on the first few pages of search results even if they have to fill them with unrelated "sponsored" content and one or two competitors that did buy some adwords. I say "competitors" but they'll often turn out to have some programming to show up as a local supplier even if they are on another continent.

[BOFH in Training]

It's funny.

My own impression of a successful company will be one which will be able to afford a hiring spree when the rest of the industry is reducing headcount, spending alot of money on research and development, so that when the economy picks up, they will be up and running with their improved / new products and services.

If everyone is reducing headcount and cutting R&D during an ecnomy downturn, noone will be well placed to be first out of the gate when the economy picks up.

Of course on the other hand it must be understood that google has a history of killing many products and services before it can take off. Maybe they can just dont bother doing new products/services, since it can be expected that it will be killed off soon after.

[EarthDog]

Killing off products could be a strategy. If your new product doesn't take off in x amount of time kill it. the alternative is the fallacy of sunk costs.

[Michael Wojcik]

Many of the services Alphabet/Google kill exist not for themselves, or for their users, but to harvest data. That's what Google's telephone directory-assistance service was for. That's what 8.8.8.8 is for. That's the primary function of search and Mail and Maps and Drive.

When the rate of new data falls to a certain point, there's no reason to keep the service going.

In other cases, of course, it's Google doing long-term A/B testing, or tweaking services to change how they're monetized. Thus we have Voice merging into Hangouts, then Hangouts and Duo being terminated in favor of Meet and Chat. One vein starts to look tapped out, so move on to another.

[Il'Geller]

Soon the investors shall get much more fun, I promise!

[Michael Wojcik]

Ooh, ominous. Is this gnomic sally better than StargateSg7's detailed rant the other day? Sometimes it's so hard to decide where to award Kook of the Week. We may have to expand to multiple categories.

[Il'Geller]

Expand to two categories: AI creator and everyone else. In the "creator" category I’ll be alone.

[IlGeller]

As you can see, I am a man of my word: ChatGPT makes almost all IT companies obsolete and hundreds of billions, if not trillions will be lost in the nearest future. Mostly with Google and FB, as well as with all Internet and database companies. Actually with all IT market.

[Snake]

Not going to happen

Let's look at this problem / proposal from a different perspective.

Google et al, Silicon Valley, is in no position to lower wages if they intend to continue to hire skilled workers. Silicon Valley pretty much has fed the over-inflated real estate markets of the West coast for a long time, thanks to a history of good wage benefits, and you will never be able to lower wages on the same people you expect to live close enough to your offices and afford to rents or mortgages.

So now they are in a catch-22. You paid workers well in the past and, now that the entire area has a history of subsisting on that level of income, you can't simply cut it off and expect things to go as planned. Workers will leave once they can no longer afford the lifestyle that they expect / became accustomed to, due to the local cost of living fed by historic pay levels, and there will be a massive brain drain as workers abandon the Valley and the businesses that it supports.

You will only be able to lower wages on new-hire remote workers, workers that come in from the start understanding this new pay scale yet having the ability to live in lower-cost locales while still accessing the office infrastructures.

If you expect your workers to live locally, you need to pay local pay scales no matter how high they might seem to outsiders.

[M.V. Lipvig]

Re: Not going to happen

Hedge funds care nothing about that. By the time the company starts crashing, the hedge fund has extracted available profits and is moving on to the next wealthy target.

[Kevin McMurtrie]

Loss of efficiency

Loss of efficiency is often rooted in the corporation and it's attitude. The systems having the most revenue generation are usually the oldest, least understood, and most difficult to maintain. These same systems can dictate which technologies the company can use because they must be kept running. I'm betting a lot of new products die when it's time to bring them in line with corporate technology standards.

I witnessed my coolest job ever disintegrate when Google bought the company and tried to rewrite it to Googley (antiquated & opinionated) standards. It had to be done but couldn't be done, so that was the end of it.

[MachDiamond]

Re: Loss of efficiency

"I witnessed my coolest job ever disintegrate when Google bought the company and tried to rewrite it to Googley (antiquated & opinionated) standards."

I have seen that happen too frequently. The parent company could have had a nice thing going if they would have left the acquisition alone and just gave it a bit more support that it needed to get to the next level. If it turned out to not be something good to buy, at least it would have had some resale value left in rather than being sucked dry and only useful as a tax write-off.

[Il'Geller]

Re: Loss of efficiency

Loss of efficiency: Google has been struggling with AI technology for 12 years, slowing down progress. Only the arrival of the behemoth Microsoft, with all its limitless resources, began to gradually change the situation. Soon Apple will come, helping Microsoft to displace Google from the electronic advertising distribution market. I, in my turn, will be glad to contribute to the collapse of Google.

[Anonymous Coward]

'ere you greedy barstage, 'ow about you apply for a position on the board if you want to direct the company?

Until then, get in line like everyone else.

[Claptrap314]

"The stock is cheap right now"

So we want YOU to buy it.

That part should have been in the first paragraph. Would have warned everyone with a half-functioning brain that the rest of the letter is less than worthless.

[jonfr]

Clueless money people

This people are clearly on the clueless level of Elon Musk. It is my guess that in 20 years time this investment fund is either going to be bankrupt or merged with another fund to avoid bankruptcy. Because outside of luck, this people don't know what they are doing.

[Potemkine!]

Translation: "more money for shareholders, less for those damn wage slaves"

Alphabet is far from being financially in danger: "Revenue is up 6% from $65.1 billion in Q3 2021, with operating income at $17.14 billion and net income of $13.91 billion for this quarter".

Those who make it possible by providing their work deserve their fair share too.

== Bring us Dabbsy back! ==

[aerogems]

Sounds to me like

There seems to be at least one too many analysts at this particular hedge fund if you ask me. Maybe they should consider that they're the ones who need to reduce staff, not Google. Maybe they should also slash the salaries and bonuses for staff.

One of the things that made Google a success in the early days was they were known for hiring people with advanced degrees, paying them very well, and sort of letting them do their thing. Then Google became a victim of its own success and in comes all the money management types who want to hire low cost contractors to do most of the work and cut salaries and benefits or projects that don't meet some opaque set of benchmarks.

[dwrolfe]

So what happens the year after 30K involuntary google alumni hit the streets?

Has TCI considered how Google's long term interests will be harmed by putting 10's of thousands of highly qualified people who hold a grudge against The Chocolate Factory on to the streets?

Google obviously pay more than they need to *hire*.

But maybe they also pay the right amount to *retain* people who could be future competitors if they leave?

I'm not a fan of Google, but they aren't idiots, and spend this money for a reason.

Maybe TCI want a short term boost so they can declare 'victory', even if every other shareholder loses in the long run?

David Rolfe