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by slantedview
1246 days ago
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It's not just that the market will punish you less. Companies are hoping that the market will actually reward them for layoffs. Unfortunately, these moves can and will be damaging to long term prospects at some companies. But long term thinking isn't something markets generally care about. It's up to companies to push back against market pressure to maintain long term progress, but it's a tough balancing act to do that while avoiding being punished by investors. |
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In fact, and this may be unpopular, I think they will be greatly beneficial long term.
Consider:
- These companies grew at greatly-expanded rates over the past few years. Google notoriously added 20% per year for 7 years straight, doubling their staff from 2017-2023. After layoffs, Google will still be right near ALL-TIME-HIGHS in staffing. Same with most of these firms. Small layoffs following the fastest growth period in their history isn't some catastrophe for their business
- Most roles being reduced at most companies are not product-creating but administrative. Lots of HR, hiring, marketing, middle managers, getting axed. If companies predict less hiring or lower ad budgets... then reducing those divisions makes sense. If you doubled your hiring team while you were hiring 20% per year, but now you expect to stay steady and only replace attrition ... what would you do with all that hiring staff?
The real damage to their long term prospects was over-hiring the past 3 years and saddling their businesses with a major problem.