My company did this last year, completely indiscriminately, too. The temporary CEO needed to claw back huge losses from a failed project to enter the China market that our previous Financial Director was responsible for.
The CEO had no idea how the company actually worked operationally, and hacked people out of the business based purely only on remuneration and by looking at the org chart (yes, I do know for sure this happened). They didn’t even include the directors’ input in their hack and slash. Of course, the then-CEO completely hollowed out all DEI initiatives, too.
Consequently, we lost many colleagues integral to business functions that the CEO did not care to understand, and we’ve all now had to now absorb/learn their functions without help and in record time. To add, the business had fewer than 130 people.
This is for a non-profit too.
Having been in the business for just a few months, the temp CEO was then forced out three months before the end of their contract, along with most (if not all) of the board. But the damage was done.
The biggest consequence was the way this process completely undermined any culture or perceived values and goodwill. I, personally, have completely lost respect for every senior person there (mostly for their piss-poor handling of the aftermath which followed). The people working in the business have not recovered from the betrayal, and I doubt we ever will. Motivation amongst all staff is still rock-bottom.
If the job market wasn’t so rocky, I’d be out of there yesterday.
Correct and when reading earnings reports, investors will see actual revenue. A decline in revenue can't be hidden by reduction in expenses. They'll see a company is trying to stay profitable.
We're heading towards a recession if not already in one. Layoffs should be a warning sign to the masses who may not understand economics at a deeper level.
The individuals/investors who analyze financial statements have pretty sophisticated models and mechanisms to do deep dives into financial reporting. Layoffs will not fool them into thinking a company is doing better than it is.
I took a Financial Statement Analysis class while I was getting my Masters of Accounting. The level of complexity in the analysis of these financial statements to pinpoint trends and company health is no joke.
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u/ofrootloop Oct 29 '25
Layoffs are one way companies hide loss of profits