| "It's kind of strange that massive layoffs like these result in a stock uptick" It means that the company has realized it's in a head-wind, and is cutting costs in order to deal with it. Layoffs are usually coincident with a re-structuring. Ergo - layoffs mean 'the company is adjusting to new market realities' - which is what investors want to hear. Layoffs usually happen after the 'crappy state' of a company has been priced into the stock ... so there's usually only upside. Also - all things considered, a layoff simply means less cost and likely an uptick in profitability, which in a spreadsheet analysis gives a higher valuation. Cisco is doing a major layoff because they have a new CEO who wants to wipe the board clean and start his term fresh. This is very cynical ... but often true. Finally - some companies do layoffs long before they are truly necessary. It's 'house cleaning' for them. Cisco does this. Because Cisco is an otherwise strong company, a layoff is good. This is not like a 'Yahoo layoff' wherein it's just sending people off a sinking ship. So - an otherwise 'strong' company doing kind of a 'ruthless' layoff is usually seen as a good thing in investors eyes. |