No, it’s also bad for shareholders. Shareholders need to see the numbers go up in order to get returns on their investment, either in the form of buybacks or dividends. A company that isn’t seen as worth investing in will show a decline in share price, causing shareholders to lose money.
Would the investors not risk adjust? Layoffs mean the company’s output is shrinking, not growing. They get a short term savings at the cost of long term productivity.
No, it’s also bad for shareholders. Shareholders need to see the numbers go up in order to get returns on their investment, either in the form of buybacks or dividends. A company that isn’t seen as worth investing in will show a decline in share price, causing shareholders to lose money.
Would the investors not risk adjust? Layoffs mean the company’s output is shrinking, not growing. They get a short term savings at the cost of long term productivity.
Investors buy on the rumours and sell on the news. They make money as long as the numbers go up when they’re long and down when they’re short.
I think John Deere is seen as a pretty dominant company in its industry. It locks in tons of farmers into its repair/service program.
I don’t know anything about the specifics of the layoffs but I’d imagine the reasoning was communicated to investors.