4 ms·

New year and quarter for businesses, gotta show you made more money by spending less on salaries. They can fire now and still be covered by "the market made us

New year and quarter for businesses, gotta show you made more money by spending less on salaries. They can fire now and still be covered by "the market made us do it". Fire now, and rehire for less in the next quarter or two. The US needs better protection for workers. If a corp has to fire 20k, that is a leadership problem and they should go too.

raydev 3y ago
At this point, we are in full bandwagon/meme territory, aside from the few companies that actually do need to fix their cashflow. Now that the stock market will probably immediately reward you if you just recite the mantra "we overhired, COVID, etc", it's just the latest way to juice your stock price. There's enough padding when you have thousands of employees that your products won't suffer too much, and it gives you an excuse to reorg and perhaps find more efficiencies in the process. In theory, I can see the draw of "a reset will make us faster". Of course, new efficiencies aren't guaranteed and the company's output may stay the same or shrink in the future, but at least the shareholders got more money. Layoffs in December can potentially be bad press, so what we're seeing now is the execution of the 2023 plan to Big Reset before the market judges this type of move as a bad look again. Everyone else is juicing their stock prices this way, why shouldn't we?
JackFr 3y ago
1) Citi has been talking about these cuts for three months. There’s little new here other than the CEO specifying the target head count. 2) There is no intent to rehire. Whole business lines are being shuttered. 3) Yes, of course there is a huge management problem. They fired 300 managing directors in November. Since 2000 Citi stock is down more than 90%. JPMC and BofA generate an order of magnitude more revenue per employee than Citi. Jane Fraser is just the latest in a long series of executives seemingly unable to tame the beast.

raydev 3y ago

At this point, we are in full bandwagon/meme territory, aside from the few companies that actually do need to fix their cashflow. Now that the stock market will probably immediately reward you if you just recite the mantra "we overhired, COVID, etc", it's just the latest way to juice your stock price. There's enough padding when you have thousands of employees that your products won't suffer too much, and it gives you an excuse to reorg and perhaps find more efficiencies in the process. In theory, I can see the draw of "a reset will make us faster". Of course, new efficiencies aren't guaranteed and the company's output may stay the same or shrink in the future, but at least the shareholders got more money. Layoffs in December can potentially be bad press, so what we're seeing now is the execution of the 2023 plan to Big Reset before the market judges this type of move as a bad look again. Everyone else is juicing their stock prices this way, why shouldn't we?

JackFr 3y ago

1) Citi has been talking about these cuts for three months. There’s little new here other than the CEO specifying the target head count. 2) There is no intent to rehire. Whole business lines are being shuttered. 3) Yes, of course there is a huge management problem. They fired 300 managing directors in November. Since 2000 Citi stock is down more than 90%. JPMC and BofA generate an order of magnitude more revenue per employee than Citi. Jane Fraser is just the latest in a long series of executives seemingly unable to tame the beast.