2 ms·
It's a lot simpler than that, firing people was earning 30x return in stock price. Almost no one's actual revenue to the company was worth that. The market ha
by tsunamifury 3y ago
It's a lot simpler than that, firing people was earning 30x return in stock price. Almost no one's actual revenue to the company was worth that. The market has created negative human incentives.
- gen220 3y agoThe person you were replying to is explaining why firing people "raises the stock price". And yes, it really is that complicated. Firing people whose salaries have a dramatically positive ROIC for the company does not raise the stock price, it lowers the stock price. The mistake, in retrospect, is the executives': they should not have over-hired in 2020. I know it's a bizarre silver lining, but to the extent there is one, workers got capital (in the form of SBC and cash) that they otherwise "shouldn't" have. If those companies had been run more effectively, most would have never been hired in the first place. It's kind of a crap silver lining, because we psychologically feel loss [of a job] 10x more than gain, but the realistic "market-optimal" alternative was not "I have this cushy, high paying job forever", it was actually "I have never had a cushy, high paying job".