Roku stock soared after the company revealed more cost-cutting initiatives, including layoffs, and boosted its Q3 revenue and adjusted EBITDA guidance.
Layoffs to me are a company saying “we had this much capacity to do work, and we are going to shrink that.” Which further translates to “as an organization we can no longer do the same capacity of work and will further expect those left behind to pull more weight reducing the quality of output from the remaining employees as we expect them to cover the new gaps.”
Barring a situation where the market shrinks, to me layoffs signal a company is sacrificing their ability to do work to cash in, and should not be considered a good sign for a company. Stocks reflect the cashing in, but the company itself is now less capable and more likely to push a worse product.
Layoffs to me are a company saying “we had this much capacity to do work, and we are going to shrink that.” Which further translates to “as an organization we can no longer do the same capacity of work and will further expect those left behind to pull more weight reducing the quality of output from the remaining employees as we expect them to cover the new gaps.”
Barring a situation where the market shrinks, to me layoffs signal a company is sacrificing their ability to do work to cash in, and should not be considered a good sign for a company. Stocks reflect the cashing in, but the company itself is now less capable and more likely to push a worse product.
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