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No one knows the right number of people to have at a given company and much of it has to do with cost of capital. In 2020 capital was extremely cheap, so cheap

No one knows the right number of people to have at a given company and much of it has to do with cost of capital. In 2020 capital was extremely cheap, so cheap that you could hire very inefficient employees and still have upside. No one predicted that, and it was very much a result of the whims of central bankers. The companies of CEOs who were able to higher employees quickly and capitalize benefitted. Now capital is much more expensive and companies cannot afford some percentage of those inefficient employees. CEOs that act quickly on this and cut staff typically end up protecting more company revenue. CEO decisions also are absolutely analyzed by the board and CEOs are typically fired based on performance relative to the market as a whole.

themitigating 4y ago
"In 2020 capital was extremely cheap, so cheap that you could hire very inefficient employees and still have upside. No one predicted that" No one could have predicted that you could hire people you don't need or are ""inefficient"" and a company could still be profitable? Again, is this a complex notion? Is this like some revelation that could only be understood after a certain date? I mean I think not. It's such a simplistic concept Also you keep claiming the people hired were inefficient and the people fired were inefficient. How do you know that? Like what is inefficient? It bothers me how you said it twice and implied everyone was inefficient (of those fired and hired)
- aeternum 4y ago
  Those inefficient people can still be profitable when interest rates are near zero. It's also not the people, more often than not it is the product they are working on. Some products can only exist when interest rates are low and money is plentiful. A company might have an NFT building division for example that brings in tons of revenue during times of near-zero rates. What do you do with those employees that specialize in designing NFTs when interest rates increase and the NFT market no longer exists? And if you can predict interest rates, then no need to be a CEO, you can make billions just by placing a few trades per year.

themitigating 4y ago

"In 2020 capital was extremely cheap, so cheap that you could hire very inefficient employees and still have upside. No one predicted that" No one could have predicted that you could hire people you don't need or are ""inefficient"" and a company could still be profitable? Again, is this a complex notion? Is this like some revelation that could only be understood after a certain date? I mean I think not. It's such a simplistic concept Also you keep claiming the people hired were inefficient and the people fired were inefficient. How do you know that? Like what is inefficient? It bothers me how you said it twice and implied everyone was inefficient (of those fired and hired)

aeternum 4y ago
Those inefficient people can still be profitable when interest rates are near zero. It's also not the people, more often than not it is the product they are working on. Some products can only exist when interest rates are low and money is plentiful. A company might have an NFT building division for example that brings in tons of revenue during times of near-zero rates. What do you do with those employees that specialize in designing NFTs when interest rates increase and the NFT market no longer exists? And if you can predict interest rates, then no need to be a CEO, you can make billions just by placing a few trades per year.