Looks like both Meta and Amazon beat expectations handily. Why do layoffs then? I understand if they were doing layoffs because the results were not going to be aligned with street expectations and they need to be reducing costs.. but both these companies not only beat revenue expectations but also margin expectations. In other words, their costs were already lower than what the street expected. I am really confused. Why are these companies laying off then? #meta #amazon #microsoft #google
Because markets are forward looking. Beating revenue is past. They all agree that the forward looking is weak.
Greed over humanity
This is the only correct answer
Company is just as greedy as its employees. This is the result of chasing 300k+ TC. Why not choose those 150k TC stable job?
Revenue beat expectations, but Operating Profit and Margin are all that matter Revenue- Expense = Profit Reduce expenses (headcount) profit goes up
Not really. Depends where the company is in its business cycle. Snap, for example has been mostly loss making save a couple of quarters
But one of the reasons Snap stock has been decimated has been their inability to become consistently profitable.
I get the layoffs but they laid off in some teams that are turning profits like EC2 or ECS or Dynamo and are understaffed too
Understaffed? Oh you don't even know how bloated EC2 and DynamoDB were. Leadership over-hired using this exact "we are profitable" narrative specifically in these orgs to build their empires. Feel bad for the employees
Because they can
First layoffs are always the toughest as you don’t want to be seen as bad company in the media (to attract the top talent/seen as best company to work for). Now that all companies are doing it and they have learned the lessons to operate more efficiently, companies can do whatever they want to cut down on expenses and make stockholders happy.
Because they want margin to beat even more.
A recently great Q1 does not mean a great Q3, Q4, and next year Q1. So do you right-size now knowing demand will peter out or do you stay over staffed and be even further in the hole?
So that they can continue to beat expectations
Layoffs are most likely the reason they are
That’s a dumb take. Layoffs would impact balance sheet 3-6 months after impact.
Stock price moves for the information, not for the actual thing happening.