Comment on Is it normal to be disgruntled?
Thorny_Insight@lemm.ee 4 months agoMost layoffs are an effort to boost stock prices because some executives made a dumb fucking decision.
…what? You want to elaborate on that a bit?
Comment on Is it normal to be disgruntled?
Thorny_Insight@lemm.ee 4 months agoMost layoffs are an effort to boost stock prices because some executives made a dumb fucking decision.
…what? You want to elaborate on that a bit?
adespoton@lemmy.ca 4 months ago
Executives need to present company forecasts to shareholders at annual business meetings. If they mess up the forecast so the business plan doesn’t match the reality, they scramble to make the books balance somehow — the easiest place to do this is by cutting staff so that expenditures line up with earnings. Modern accounting means that even though they still have payouts to employees, they can count this in a separate loss bucket so that the bottom line item that investors watch still comes out where they “predicted” it would, which props up the stock price, making investors happy and preventing them from replacing the executives.
xmunk@sh.itjust.works 4 months ago
That is one part - the other half is just simply that the market expects a response to any perceived failure. If a publicly traded company has a bad quarter the market wants to see some corrective action and it wants it now (long term plans don’t mesh with the constant news cycle of the market). Layoffs are a way to lower your expenses and cause a sudden shift in profit numbers… even though they nearly always result in long term damage to the company.