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by pascalxus 3317 days ago
Big Layoff. IBM must be in big trouble. Tell everyone to short that stock.
2 comments

They've had declining revenue for something like 20 quarters in a row. This isn't news.
Why would a layoff be bad for IBM's business?
Agreed. Layoffs are generally positive for stocks at least in the short term.
Do you mean generally positive for [the stock price] or [potential earnings]? Seems like while layoff announcements generally would improve earnings they hurt stock prices. It may be related to the perception that layoffs are often reactive to worsening conditions rather than proactive right-sizings of the business.
If Facebook said that people have stopped using Facebook and they're laying off 10% of the workforce that would be a negative. IBM on the other hand has its hands in dozens of businesses with declining revenue with no real way to improve the situation. In those cases, better to lay people off and milk the cash cow for a few years.
They usually do increase stock prices though, or at least announcements that would be released in places as large as national news channels.