Kentclark

#4 Most profitable company laying off?

22mo ago

GareebEngineer

Layoff doesn't have to do with profitability. It has to do with shareholder expectations.

During covid time, all tech companies assumed that tech market will keep growing faster & hired tons of workers. Now the market doesn't seem to be following what they were expected & they will miss their financial targets leading to wrath of shareholders. Hence doing the layoff.

Also layoff rarely helps in decreasing expenses in the short term as in US severance etc is hefty. Tech companies are doing course correction for coming years.

Kentclark

Stealth22mo

Financial targets indirectly mean profit/revenue. This layoff would just be a micro dent on their finance (approx 2%).

Unless they want to clear the people clutter in org, it doesn't make sense that they did it under financial pressure

Brisktalk

Amazon22mo

There's always pressure from shareholders to show growth.

With the market dropping, every company can cut costs and become more profitable.

PE & activist investors were a primary market force that exist because operators don't run companies efficiently or to their potential.

A lot of smaller SaaS companies which refuse to show prudance and cut costs are gonna get taken over by activist investors who'll then do lay offs and make a good buck.