4 ms·

Going 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, whi

Going 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 ago
The legal standard is not to "maximize profits."
- hellojesus 4y ago
  You 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 ago
They'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 ago
  They 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 ago
  Seems 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 ago
    When 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 ago
    Perhaps record corporate profits is not something society should optimize for if it accompanies large amounts of disruption in the lives of people.
- x11vnc4life 4y ago
  A bunch of emotionally stunted amature stoics who heard a ted talk about decimating legions have a go at it for themselves
officialchicken 4y ago
This 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 ago
  Yes, 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.

staticman2 4y ago

The legal standard is not to "maximize profits."

hellojesus 4y ago
You 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 ago

They'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 ago
They 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 ago
Seems 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 ago
  When 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 ago
  Perhaps record corporate profits is not something society should optimize for if it accompanies large amounts of disruption in the lives of people.
x11vnc4life 4y ago
A bunch of emotionally stunted amature stoics who heard a ted talk about decimating legions have a go at it for themselves

officialchicken 4y ago

This 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 ago
Yes, 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.