![]() When those costs are lower, a company can keep more of its revenue and increase its profits. All businesses have costs, whether for the buildings they operate in, the raw materials they use to make their products or the costs of paying their employees. Why companies conduct layoffsĪt their core, layoffs are about cutting costs. There may be other fees associated with trading. residents 18+ and subject to account approval. Were the layoffs responsible for that turnaround? Does reducing headcount always give stocks a boost? Here’s what you need to know about how layoffs can impact a company’s stock price. tech companies saw their stocks rise 5.6% in the month following their announcement of job cuts. ![]() Late last month, data analyzed by Bloomberg showed that on average, large U.S. Amazon stock is up 19% so far in 2023, and shares of Facebook parent Meta are up nearly 50%. Shares of Google parent Alphabet, which laid off 12,000 people last month, are up 15% this year, while shares of Microsoft (10,000 employees laid off) are up 6%. In the wake of those job cuts, which executives said were necessary to cope with a worsening economic climate ushered in by rising interest rates, tech stocks have come roaring back. Another 88,000 tech layoffs have already been announced in 2023. Those layoffs numbered nearly 160,000 last year, according to Layoffs.fyi, which tracks layoffs in the tech industry. As tech stocks plummeted in 2022, tech companies began laying off employees in huge numbers.
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