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DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
- hellojesus 4y agoGoing to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors. This happens in normal markets and helps to ensure companies continue to exist into the future and don't bleed out. Defunct companies can't employ anyone.
- staticman2 4y agoThe legal standard is not to "maximize profits."
- hellojesus 4y agoYou are correct. I was wrong on the standard. They have a duty insofar as they know shareholders will replace them via voting power if they displease the majority of their shareholders, and generally shareholders want to increase value or dividends. However, that's not always the case. Shareholders could generally desire anything else. Thank you for the correction.
- cyanydeez 4y agoThey're firing people cause of a meme, not cause anyone made a business case as you are implying. A meme: that times are tough and firing people will free up capital. It's a meme my boy. people are losing their jobs cause CEOs need to "make tough decisions". They're not doing business evaluations. They're following the herd. A meme.
- deleted 4y ago[deleted]
- bhhaskin 4y agoThey are laying people off because now is the time to do it so people don't think twice about it. Best way to remove dead weight with little consequence.
- s1artibartfast 4y agoSeems like the meme based leadership is working if they are bringing in record profits and conducting stocks Buybacks. Feel free to remind me if they go into bankruptcy
- cyanydeez 4y agoWhen you've spent the past 30 years ensuring that your plate is always filled first by buying out the political class, of course you'll get record profits. That don't stop your decisions from being arbitrary and just following the herd.
- Apocryphon 4y agoPerhaps record corporate profits is not something society should optimize for if it accompanies large amounts of disruption in the lives of people.
- x11vnc4life 4y agoA bunch of emotionally stunted amature stoics who heard a ted talk about decimating legions have a go at it for themselves
- officialchicken 4y agoThis is an oft repeated misrepresentation. In the US, case-law shows there is a fiduciary duty to the corporation itself, not the shareholders. And there are no laws or regulations which require the maximization of profits.
- hellojesus 4y agoYes, I was wrong. This helped to clear it up. https://skeptics.stackexchange.com/questions/8146/are-u-s-companies-legally-obligated-to-maximize-profits-for-shareholders https://skeptics.stackexchange.com/questions/8146/are-u-s-co... That said, voting shareholders could replace management if they deemed them to act differently than they think the next best candidate could. So there is some risk in deciding not to try and maximize the short or long (depending on voters) value of the company. This helps to explain why the index giants like Vanguard are getting away with pushing their nonsense ESG on companies.
- v0idzer0 4y agoThis is dramatic even for Twitter
- ecf 4y agoIs it though? Pretty understandable to be pissed off that all these companies are collecting record profits, doing layoffs, and then immediately buying back stock. Something is fundamentally broken.
- s1artibartfast 4y agoPaying workers you don't need and don't help your bottom line is fundamentally broken. They aren't running a charity for jobs program.
- ngetchell 4y agoMaybe the jerks that hired, and subsequently fired, those workers should be fired first?
- Apocryphon 4y agoA point as banal as it is unhelpful. Perhaps if companies didn’t act like charities during good times by promising workers lavish compensation and security, entangling in more workers than necessary, and then pulling the rug from under them during bad times, then this false expectation would have never arisen.
- steponlego 4y agoLots of ESG hires who aren't doing shit other than organizing "events" and finding issues to complain about, this is dead weight.
- syspec 4y agoDoesn't seem like that, most of these were engineers https://www.crn.com/news/cloud/digitalocean-layoffs-engineering-storage-security-caught-up-in-cuts https://www.crn.com/news/cloud/digitalocean-layoffs-engineer...
- syspec 4y agoDoesn't seem that way. Most of these were engineers - https://www.crn.com/news/cloud/digitalocean-layoffs-engineering-storage-security-caught-up-in-cuts https://www.crn.com/news/cloud/digitalocean-layoffs-engineer...
- steponlego 4y agoWhile the link does say that seven engineers were let go, it doesn't say how many other people were. There's no additional information, is this whole story about a mere seven people? It appears to be. So were only seven laid off? Doesn't say. Seems like CNN is leaving out some information.
- darthrupert 4y agoWhy do people expect that profits and HR actions have so much to do with each other -- even with tons of evidence to the contrary?