It just seems counterproductive, removing your workforce because you want to grow more
In: Economics
The stock market emphasizes short term gains. This means big companies must be profitable every quarter (three months.). You are right: this can be counterproductive. But ultimately, the only thing that matters is those quarterly earnings reports.
Employees are a significant expense that you can quickly reduce with layoffs. Simply put, not many of your expenses can be dramatically tuned down. So if they have to reduce short term expenses, the layoff handle is easy and effective.
Edit: spelling
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