If you're increasing productivity, you should be doing more and growing, yes? If you're cutting payroll costs and trying to have the same level of capacity...your business sucks and you deserve your stock tanking.

Layoffs are a strong signal that a business is not investing in growth and is just trying to wring more profit from the same thing. If investors were rational, they'd walk away.

Maybe replacing the expensive C-suite with an LLM would help make better, growth-oriented decisions.

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bluGill an hour ago | parent | next [-]

> Layoffs are a strong signal that a business is not investing in growth and is just trying to wring more profit from the same thing. If investors were rational, they'd walk away.

Not always. A buggy whip maker in 1920 should be laying off people. No amount of investment in buggy whips will bring that market back.

A layoff is saying that the investment will not pay off. So long as the company is cutting the right things they are good. Many layoffs are not done with a proper cut of the work do be done and so are bad, but that doesn't mean they are always bad.

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xandrius an hour ago | parent | prev | next [-]

I think the issue is that at any given point the work required to fire a 100-200k engineer is less than making that engineer do work to make you that much.

If you're growing obviously it's stupid to fire but if you have plateau'd the easiest gain is to trim the fat, so to speak. Also once a company is acquired by a private fund, everyone becomes a title and a number in a spreadsheet, that's all.

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pjmlp an hour ago | parent | prev | next [-]

In consulting you don't make magically customers out of nowhere, and there is a limited pool of customers to feed from.

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redwall_hp an hour ago | parent [-]

Again, shortsighted. There's no reason a business has to have a single product. If you run out of customers for cars, you make HVAC and front end loaders.

A lot of companies simply have no direction and aren't looking to build new products. They had a success, rotated in some myopic execs, flipped into rent-seeking mode and are trying to wring more cash out of the same progressive enshittified product.

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prewett 31 minutes ago | parent | next [-]

Generally you can only profitably expand into adjacent products. Making and selling cars and HVACs are completely different, meaning that your expansion will be starting from zero knowledge. Furthermore, the sales channel of HVACs, sales strategies, etc. is not likely to have much in common with that for cars, so you are essentially creating a whole new startup company. (In the case of HVACs, it would be a startup in a commodity market, which would make no sense, because commodity markets have no real profits.) Doing one thing well is not just Unix philosophy, it is also a sound business strategy. Of course, usually adjacent things that could be done well suggest themselves, but often there is a limit to these.

	▲	redwall_hp 9 minutes ago \| parent [-]
		Perhaps you've heard of Mitsubishi, Toyota Group or Samsung? Notably, Mitsubishi is involved in making cars, HVAC and heavy equipment. Or, for that matter, Apple. If they subscribed to that philosophy, the iPhone wouldn't exist. Honestly, they would have kept trying to make the Apple II.

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bluGill an hour ago | parent | prev [-]

That dilutes your experience and risks losing focus on the customers you already know how to serve well and in turn can destroy your company.

It works for some it fails for others.

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lotsofpulp an hour ago | parent | prev [-]

The rational thing is to analyze the opportunity cost of the investment, which is dependent on the always fluctuating prices.

Some businesses can grow, some cannot grow, some grow at different rates. The risk adjusted (subjective) prices determine whether or not an investor should walk away.