It just seems counterproductive, removing your workforce because you want to grow more
In: Economics
Public companies have to answer to shareholders. Shareholders have bought stock in the company in hopes that the value of the company’s stock goes up.
The value of the stock is usually measured by profit.
Let’s say a company made 1 million dollars less in profit in the year 2024. Their stock will be valued less.
So if they fire 10 workers who each made 100k, now they have made up for the 1 million deficit. They fire 20? They’re profitable again. Shareholders happy and stock might not fall as low as it would have otherwise.
Yes it is counterproductive and if companies continually do this their workforce will pretty much be a skeleton crew but that’s capitalism.
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