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There is an advertising recession underway. Ad budgets are down and sectors that were heavy spenders have disappeared (crypto for example)...this is having a kn

There is an advertising recession underway. Ad budgets are down and sectors that were heavy spenders have disappeared (crypto for example)...this is having a knock on effect with Media companies (meta, google, amazon)...the downturn was quick and is exaggerated by the stock market turning bearish. As a result there is less forgiveness for companies to be publicly traded and not make a profit. I think the "google did it" is a post rationalization for past layoffs rather than a driver of layoffs. Cutting costs is the fastest, and mostguaranteed, way to profitability. For private firms there is more scrutiny of prerevenue start ups trying to raise, the message from these firms is "we need to get on a path to profitability" . In my opinion, if you are working in a company where your CEO has just said those words, you should start interviewing. Best advice i ever received was its easier to spend money than make money, and the past 10 years has allowed people to start businesses that don't, and may never, make a profit.

oxfordmale 4y ago
As the research by this professor shows, layoffs are not a guaranteed way to profitability. Unless a company is in a dire financial situation (Twitter), layoffs do not pay off long term. Lay-offs are expensive and tend to result in lower staff morale and, in addition to that, lower productivity. It generally increases staff turnover, especially if pay raises are also delayed. Good staff leaves typically first, as they have no problem finding another job. That leaves you with an overworked and demotivated staff base when the economic downturn turns into an upturn. Even if you manage to rehire staff quickly to deal with the upturn, you still need to train them before they start adding value.
- dougSF70 4y ago
  Could you argue that excess hiring is also not a path to guaranteed profitability because it leads to layoffs.

oxfordmale 4y ago

As the research by this professor shows, layoffs are not a guaranteed way to profitability. Unless a company is in a dire financial situation (Twitter), layoffs do not pay off long term. Lay-offs are expensive and tend to result in lower staff morale and, in addition to that, lower productivity. It generally increases staff turnover, especially if pay raises are also delayed. Good staff leaves typically first, as they have no problem finding another job. That leaves you with an overworked and demotivated staff base when the economic downturn turns into an upturn. Even if you manage to rehire staff quickly to deal with the upturn, you still need to train them before they start adding value.

dougSF70 4y ago
Could you argue that excess hiring is also not a path to guaranteed profitability because it leads to layoffs.