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It seems really perverse incentive wise that layoffs always seem to bump stock prices. Companies are going to need to transition at times and have cut backs and
by cannonedhamster 8y ago
It seems really perverse incentive wise that layoffs always seem to bump stock prices. Companies are going to need to transition at times and have cut backs and pivots but it doesn't seem like it should be a market signal that the company is doing something worth investing in so consistently. Many times what these cuts do, in many companies, is just offload the tech overhead to another department, or lower quality and quantity of work being done by another department. When I was in IT they wouldn't replace workers who had left. This caused IT hold times to go from less than a minute for an answer to over an hour. We estimated that it ended up costing the company over a million dollars in man hours over some non-trivial period because of wasted time on users who were no longer able to perform their duties. They outsourced the call center after I left. I heard it's only gotten worse as the call center frequently hangs up if the call is too hard or is taking too long since they are tracked on call times and numbers. Perverse incentives.
- hinkley 8y agoTech companies don't know how to fire people, and the market seems to know this. It's generally assumed that the first round of layoffs, if small, is to cull underperformers. Further rounds seem to make everybody jumpy.
- mistrial9 8y ago> Tech companies don't know how to fire people, and the market seems to know this. citation on that?
- Rexxar 8y agoHN is not wikipedia but I don't have any citation to prove it.
- yardie 8y agoIntel was one of the first companies reported to use stack ranking. If anything they had a reputation of firing too aggressively or for mundane reasons.
- nradov 8y agoWell if you think the market has mispriced this move then the smart trade would be to go short on Intel and long on their competitors.
- prewett 8y agoA 0.9% increase is noise. The whole market went up about that amount, it doesn't have anything to do with the layoff announcements, just prevailing sentiment among active traders. I wish news outlets would stop mentioning stock price movements unless they are at least 2% and definitely not trying to assign a reason until at least 3%. (To be fair, the article simply mentions it as a non-sequitur).
- opportune 8y agoDepends on the stock too. For example P&G barely moves at all w.r.t noise whereas AMD and Micron frequently move 5% due to noise
- mateo411 8y agoUtility stocks tend to have low volatility and they pay higher dividends.
- opportune 8y agoI know I was just saying that the rules my parent comment proposed were too cut-and-dry, there is more context than just the percentage movement of an arbitrary stock required to determine if something is noise
- ct520 8y agoAmd is a trip to watch daily. Definitely aggressively goes up or down more than others (intel)
- deleted 8y ago[deleted]