I know lay-offs seem to be happening a lot, especially in tech right now, and can happen at any point – but just this month there has been Microsoft, Discord, Twitch, Google and RIOT lay-offs to name a few, and I’m sure many others.
Unless it’s just coincidence, why do these lay-off announcements seem to be like a chain reaction? I’m guessing that there must be economical reasons as to why, such as boosting numbers before a certain reporting season? Or is it just to stay competitive in terms of profit margins?
In: Economics
The company you run loses 3% of its value this year. You did a good job if your competitors lost 15%, you did a bad job if your competitors grew 5%. To account for factors outside your immediate control, executives are incentivised for results compared to competitors. If your competitor just saved 100million dollars through layoffs you too need to save 100million dollars. Chances are the justification for company A doing layoffs applies for company B
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