Why do companies typically choose to implement layoffs affecting numerous employees rather than considering salary reductions for top executives like the CEO?
In: Economics
Your parents buy you once a package of candy. It’s quite a big package, so you eat the candy until you can’t eat anymore, and then you share the rest with the friends. It’s quite a big group so everyone gets just a piece, but it’s fine, it’s better than no candy. They are happy.
Now, this happens regularly. You’re starting to get popular and get some benefits in the friend group as you bring candy often, and everyone is happy.
But one day, the package you get is smaller. And you got used to eat quite a bit of candy regularly, so you are thinking what to do now, should you take only one and share the rest with everyone or just take all for yourself. You decide, ok, I’m eating all the candy, they anyway get only one, that’s like nothing, no candy for y’all.
However, you vastly overestimated your popularity, and didn’t understand that all the other kids are letting you play only because you were giving them candy. They are not going to play with you anymore, you’ll need to find new friends now
Furthermore, you didn’t realise that your parents were giving you candy only because they thought you have lots of friends and you’re sharing it, they were giving it to all the kids, not just you. They stopped giving you anymore, as now you don’t have friends.
But hey, at least you got lots of candy in the end, instead of getting one and then hoping that the candy supply will increase again.
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