I Can’t figure it out that you lay off 20% of your employees and your stocks price go high the next day
Yes, investors want to see more profit. If your revenue is declining, the company needs to shed costs (basic economics). The quickest solution is to lay off employees.
well that’s why you’re not a CEO
Meta set the trend to pushing the stock value by layoffs and stock buybacks,rest all would follow the same.
Meta did in in Nov 2022, have you been living under the rock(no pun intended) during 2022?
Meta is the first one started mass layoffs and then huge buyback stocks to accelerate the price,layoffs ,recession continues from 2022.
Same financial results, lower costs: more profits!
Let me explain it based on last quarter results and i was expecting layoff since then. So to break it down: 1. Revenue growth of 30% is misleading. the really high margin business is subscription which grew by 14% only. The rest predominantly from shop pay which is lower margin. Hence gross profit only grew 15% even when revenues grew much more. 2. with growth in teens and current market condition where you cam get 4-5% yield risk free you cannot increase RnD cost by 60% which they did. This was the time when others were shedding costs on balance sheet and shopify increased operating costs tremendously which is not in par with growth rate and not sustainable. So tobi had to fix operating cost bulge. Hence the layoff and cheering from investors. more details: https://m.youtube.com/watch?v=_wQvqd924kc&feature=youtu.be
They reduced operating cost and apparently Wallstreet didn't have high hopes for massive innovation coming from the 20% they let go so.. They're happy if shopify keeps the lights on with less overhead
Twitter really opened a lot of people’s eyes