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do_you_even_ship_bro t1_jde6bq3 wrote

Layoffs are short term stock gain, long term losses. You lose talent, have to pay tons of severance, and lots of efficiency loses due to distractions.


BuzzBadpants t1_jdel67g wrote

Is it really long term losses though? We’ve witnessed how companies were raising prices for goods because of supply chain issues, and then the supply chain is solved but the companies didn’t lower prices because they were finding they could make more money by producing fewer widgets.

If your goal as CEO is to make fewer widgets at a high markup, you don’t need as many employees


Amadacius t1_jdfg0ry wrote

That's just price discovery. But long term their goal is to make and sell more widgets at the higher markup.

Generally companies are expected to grow every single year. Whats your growth plan? How does firing employees help?


Powerlevel-9000 t1_jdf3tw1 wrote

I got downvoted when I said this before. Short term boost for the stock. But costs to rehire people are crazy. It could cost 6 figures to hire and train a knowledge worker.


Amadacius t1_jdfgd9r wrote

Its not even really a short term boost for the stock. Layoffs are seen as a massive red flag for the stock and news of them is usually followed by a drop in stock price.

That could be counteracted by funneling money to shareholders (dividends or buybacks), but since layoffs are expensive, you don't actually have more money to funnel to shareholders. You have to pay a ton of severance, and you will need the liquidity in a few months when you rehire anyway.


belleri7 t1_jdeprrg wrote

Depends on who you're firing haha. You can't assume 100% of employees are good at their job and mass layoffs are a good way to get rid of the not so stellar workers.