You guys always take it to the extreme. It's an optimization problem. The market thinks 10% is a pretty good number that will translate into higher profits, likely because they believe the people laid off are non-essential to the business.
I don't know what percentage is too much, all I know is that the stock market is not the economy, and things that tend to be good news for workers and main street tend to be bad for the stock market. For instance, in the past ~6 months the labor market continues to be strong reporting many job openings, which is good for workers as this allows them to seek higher-paying wages. But the market went down after each report because it meant that JPow would further increase interest rates, which are bad for the majority of businesses since they don't have positive free cash flows and rely on zero interest rates to continue operating with debt.
We've been living in the upside down for a while now. And gravity is coming back :)
Salesforce employee count doubled since the pandemic started. Doesn't seem unreasonable to believe some of those employees can be cut without affecting revenue too much.
Well I understand it, but the analogy I was trying to illustrate is that in theory, 10% of a workforce produces something, and while it costs something to employ them, it also costs something to lose their employment. In theory. Otherwise, why were they hired to begin with?
There are inefficiencies in every organization. It's not like 100% of the workforce is 100% productive and critical to operations. You can cut a lot more than 10% before it starts to affect the business in a meaningful way.
I don't know what percentage is too much, all I know is that the stock market is not the economy, and things that tend to be good news for workers and main street tend to be bad for the stock market. For instance, in the past ~6 months the labor market continues to be strong reporting many job openings, which is good for workers as this allows them to seek higher-paying wages. But the market went down after each report because it meant that JPow would further increase interest rates, which are bad for the majority of businesses since they don't have positive free cash flows and rely on zero interest rates to continue operating with debt.
We've been living in the upside down for a while now. And gravity is coming back :)