this post was submitted on 14 Jan 2024
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Layoffs aren’t a good look for a lot of shareholders unless the org is bloated. There are a variety of metrics to compare companies against each other in terms of head count efficiency.
Company values are basically just a view of future revenues minus expenses plus/minus sentiment. If you lower the company expenses, all else being equal, the share price should go up. Those shares are worth more.
But it also might say we’re not growing as fast as we thought we would or our business is challenged in other ways which will negatively affect sentiment.
Shareholders don’t like layoffs. They would much prefer you a) hired the right people the first time, b) hired the right number of people, or failing that c) grew into the number of people that you hired.
No one loves a declining business, and many businesses doing layoffs are - either outright declining or declining growth.