> The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it.
How is failing to predict market conditions a few months into the future and over hiring part of making a publicly traded company money? If anything, these layoffs are an admission from management that they're wasting money.
It's not wasted money. They hired people at peak, and fired them when peak reverted. If they'd ceded market share to competitors who were aggressive when peaking then these CEOs should have been fired.
> They hired people at peak, and fired them when peak reverted
They fired people because they're getting pushed by Investors asking for better Return via stock price just keep that in mind.
META culled 11k and stated that they save $1Bn last year. Fast forward to last week: they somehow have $40Bn to buyback their stock, rewarding investors for a decent gain: 44% within a month. There's a good possibility that other companies will follow suite and execute stock buyback.
Stock Based Compensation just got wiped out from the book as well: typical RSU is 4 years, if some of these folks are on their first and second year (or have refresher), those future expenses are gone too, back to the pocket of Corps.
Salesforce is surrounded by vultures (activist investor) right now.
Juuust... keep that in mind: the mob wants their money back and they set aim at the CEOs.
> failing to predict market conditions a few months into the future
Literally nobody is able to correctly predict market conditions a few months into the future. If you could do that reliably, you'd quickly become the richest person in the world.
Faulting CEO's for failing to predict the market is setting an impossible bar. All they can do is respond in a reasonable way to current market conditions and direction. Markets are going up and they can hire. Markets are going down and they have to fire. Nobody has a crystal ball here.
> If you could do that reliably, you'd quickly become the richest person in the world.
How? Understanding broad market trends doesn't give you some god-like ability to time the market. Also worth adding, tech CEOs are some of the richest people on the planet, so they're already at the level where we should expect them to be able to forecast accurately a few months out. That's what they're being paid for, after all.
If any CEO could predict market conditions with any sort of accuracy, they'd make a hell of a lot more money and have loads less stress trading the market. It's impossible to know the future.
It depends on whether those few months or years were enough time to earn back the value invested in training newly hired employees.
If an additional employee in a busy year can make more money for the company than it costs to hire, train, and employ that person, then the company can be expected to hire them and fire them when it's no longer as busy. That's not wasting money, that's making money.
I'm fortunate to work for a small shop with business values that include metrics like retention that aren't tied to making shareholders money, including a goal of "never have to lay people off". And we haven't, in 35 years of operation, through major upswings and downturns. We're aware that this makes us less financially competitive for sure in the short term and arguably in the long term, but we're OK with this compromise and others, because we'd rather take care of our people than win the rat race. But we're the exception, not the rule.
If there's a 10% chance that your business is forever upended, and if you don't react you'll be left in the dust is the right decision "90% chance we'll be good, no need to change plans" or "Hey we're making too much money to take any risks here, lets adapt to the 10% chance, and if the 90% comes to pass we'll just go back to the way it was"? I think it's pretty clear that tech CEOs made the right choice from investors perspective. I don't see how you can come to the conclusion that they failed to predict market conditions when you don't know what odds they came up with.
> How is failing to predict market conditions a few months into the future...
Most things like this are very difficult (impossible) to predict. In hindsight everything seems obvious, but it usually isn't obvious in the moment.
In 2020/2021, shareholders of tech companies were demanding growth and pouring money into these companies to create growth. Most companies took that money, hired people to create growth, under the impression that the flow of money wouldn't be abruptly and unexpectedly turned off, which is what happened in early 2022, leading the companies not being able to raise additional capital, leading to lay offs as they pivot their strategy to more cash efficient operating models.
TLDR: It's hard to predict the future. And when you're in a bubble, it's very hard to recognize it until after the bubble bursts. And, bubbles can last multiple years (even decades). If you asked people in 2021 if tech valuations would continue to increase, I'm guessing many people would say "yes" even though a few short months later the answer was obviously "no".
How is failing to predict market conditions a few months into the future and over hiring part of making a publicly traded company money? If anything, these layoffs are an admission from management that they're wasting money.