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It's crazy that AMZN announces this and the stock goes up in after hours trading. People are losing their livelihoods yet rich people only care about the potent
by raziel2701 4y ago
It's crazy that AMZN announces this and the stock goes up in after hours trading. People are losing their livelihoods yet rich people only care about the potential higher profits.
This is very disconnected from reality, amzn needs consumers to buy their products. If layoffs keep piling up higher and deeper something is going to break and hello recession!
- unity1001 4y agoYou just summarized entire das Kapital...
- asah 4y agoAMZN stock is held by millions of people, not just "rich"
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- adoxyz 4y agoLaying people off reduces one of the biggest costs to an organization, thus making it more profitable (even if in the short term), thus the stock price rises. Stocks are always forward looking and investors believe that by cutting down costs and re-focusing will make amazon worth more in the future.
- asdff 4y agoHow can a company be more profitable with less workers if the workers are the source of the profits?
- 8note 4y agoThe workers aren't the source of profits in all cases. Eg, a musician is a worker, but once they've written a song that you now iwn, you can sell infinite licenses to it, regardless of whether the musician is still being paid
- asdff 4y agoBut if you hire that musician, you can create more products you can license. The worker generates more revenue streams for you. This is why streaming companies are leasing soundstage space, to create more stuff to license themselves.
- strgcmc 4y agoBut not all types of music are equally in demand. If consumer tastes change, it would obviously make sense to layoff musicians trained to make music for a genre that nobody wants to buy anymore.
- asdff 4y agoThat's one way of thinking which IMO is a cold way to look at the world. I would say its just simply nicer to retrain your staff to meet your goals versus cutting them off and finding new staff all the time. Too bad nice typically goes against profits in this economy.
- midoridensha 4y agoThis is why, these days, musicians all make their money by touring. People will pay over and over to see the same person play the same song in person.
- sokoloff 4y agoPerhaps the conclusion is that (at least some of) the workers aren’t the source of the profits.
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- mattrighetti 4y agoThat’s the point, they’re laying off unprofitable orgs. What makes you think that more workers translates to more profitable?
- HDThoreaun 4y agoAlexa lost $10 billion last year. Those workers were the source of losses through their salary.
- monktastic1 4y agoBy this logic, every company should always maximize the number of employees they have, regardless of whether they have anything useful to do.
- ascotan 4y agoApparently they're not the source of profit: ```Amazon initiated a broad cost-cutting review to pare back on units that were unprofitable```
- asdff 4y agoSeems like a better solution would have been to shift that labor to more productive uses that can generate revenue, than to throw some of the oars off your boat to go faster.
- lightbendover 4y agoNot everyone is fungible. How can you repurpose recruiters effectively when you're not recruiting? How can you repurpose well-paid robotics engineers when you've realized you have over-invested?
- lcw 4y agoIn general layoffs especially when they are proactive, which in this case they seem to be, show investors that the company is being fiscally responsible. This isn't an indication that Amazon is going to increase profitability it's a sign to investors that they are taking in recession indicators and adapting accordingly. It doesn't seem malicious it seems perfectly reasonable and sane. Of course it's Amazon so there is another layer of context, but this is a rational and normal investor response.
- asdff 4y agoI don't understand how its rational unless you assume staff have negative value. They don't, they have positive value, nothing gets done without staff. More staff means you output more work and make more money. Staff should be the last thing to cut.
- sokoloff 4y agoA $10 bill has positive value as well. Nevertheless, buying them in bulk for $15 each is a bad idea. (Merely having positive value is not enough to make something a good purchase.)
- lcw 4y agoStaff has negative value when demand growth doesn't meet a companies forecasts. You are right there should always be positive output from staff, but it doesn't mean that there is a demand for said output. I think when you say value you aren't speaking fiscally. If that's the case then I would say I'm not trying to minimize the output of workers being laid off. I'm just saying that the value of their output isn't marketable to consumers, so from a capitalist perspective a company should rationally make adjustments.
- asdff 4y agoIf the value of their output isn't marketable, put them on a project that is. Having the workers suffer from their manager's decision makings for these divisions is cold and cruel.
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- sys_64738 4y agoA business is run to maximize shareholder value. Cutting costs is part of that equation.
- twblalock 4y agoAlso, it's worth remembering that the number of Amazon shareholders, and the number of people impacted by Amazon's stock price as a component of index funds, is vastly larger than the number of Amazon employees.
- asdff 4y agoIt's not really maximizing shareholder value though. In this case its like cutting off your leg and claiming you lost weight.
- twblalock 4y agoAmazon is one of the largest online retailers, and one of the largest vendors of compute capacity to other companies. They are better positioned to see a downturn coming than almost anyone else. What makes you think they got it wrong?
- asdff 4y agoI don't think they got it wrong, I just think layoffs are foolish because staff generate the profits for your business. Does Amazon really need to cut costs? For 2022, revenue was up 15% year over year. The only thing bad going on with Amazon in this economy currently is their stock price, not their profitability or how much cash they have or how many workers they are able to afford.
- jethro_tell 4y agoIt might be. If you pay in stock, juicing the stock number of you can could save thousands on the backend in wages paid out in total shares.
- devmunchies 4y agoif the employees that were cut were working on a product that was losing money, then its more akin to liposuction. Its not about the employee's skills either, it's the business unit. If you start cutting database or network engineers on the AWS team, now we're talking about cutting off limbs. Put another way, lots of startups are failing or are going to fail in this environment. Layoffs are like killing "internal startups" that aren't moneymakers.
- rvz 4y ago> It's crazy that AMZN announces this and the stock goes up in after hours trading. No it isn't. It is quite typical for a companies stock to spike up after a layoff announcement especially when the number was higher than initially reported. And as always totally expected.
- worik 4y agoYes it is crazy. The craziness encompasses the entire system Systemic insanity
- unforeseen9991 4y agoIt'd be crazy if they didn't. Especially after the covid bubble and running headlong into economic uncertainty.
- subsaharancoder 4y agoMeta stock went from a low of $89 to now $124 after the layoffs. Wallstreet loves some good bloodshed and rewards it with higher stock price! P.S. Ex-Meta who got impacted by the layoffs
- HDThoreaun 4y agoMeta especially went up because their biggest problem is mark going rogue. Investors have no control over him and he’s been continuously signaling over the last year that he has no interest in listening to them. The layoffs were a token that showed he hadn’t totally turned his back. A bit of a unique situation.
- pishpash 4y agoIt also didn't go up that much. 1.7%?
- _heimdall 4y agoMarket analysts often view cost cutting measures like layoffs as a favorable sign for near term growth. While it makes a lot of sense to view this as an indicator of trouble, it's more often spin as an indicator of a well led company that recognized the problem and is already on the way back up. Synically, an argument can be made that those largely driving the markets are looking for any reason to make money. It doesn't actually matter much what the news is, just get ahead of the market movement then start turning dials and pushing sentiment.
- bdcravens 4y agoHow else would you value a stock? It's fractional ownership in a company; bottom line matters. Also, many people who aren't "rich" own stocks.
- WalterBright 4y agoI started buying stock with my first real job.
- pessimizer 4y ago> Also, many people who aren't "rich" own stocks. But the sum of all people who aren't "rich" don't own very much stock (as a proportion.) And 99% of the ones that do own that stock indirectly through a fund with added management costs and management risk.
- rendang 4y ago> If layoffs keep piling up higher and deeper To put the current situation in perspective, the last unemployment rate reading was 3.7%, a level so low that it was never hit in the entire period 1970-2018.
- phpisthebest 4y ago>>people are losing their livelihoods yet rich Do you have a 401K or retirement account of any type? Chances are you are one of the "rich people" that impact that stock price.