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Message: <blockquote data-quote="jgsugden" data-source="post: 9224916" data-attributes="member: 2629">Most of the criticism of these moves has nothing to do with (net) earnings per share or stockholders getting their money.  Econ 1 will give you enough insight to know that cutting costs increases your profit ... in the short term.The criticism here, and in layoffs in general, is that they are more often than not done for the wrong reasons, to the wrong people, and at too high a cost in the long term for the company.Stockholders are happy to see a stock flourish so that they can get a great dividend, sell high, and then buy it again low after a crash and when they start to fix all the problems created by the last short term gambit artifucally spiked the value.  That is the oldest tale in the stock market.  This serves the stockholders well, but it is disasterous for society in general.  It destroys huge amounts of value by removing people from environments where they have a lot of valuable knowledge.  We lose continuity in progress when the people that understand the problems facing a company are driven out or leave from being overworked.  Too many of us have seen this over and over and over ... companies get a short term boost then get torn apart by in inability to deliver down the road.  Thre are times when layoffs must happen.  If a competitor releases a competing product that you can't replicate and that will entirely take your customer base - layoffs may be necessary.  If you face a political or legal situation ina  country that makes employing people there too hard - layoffs might be the right call.  When we're headed into a bad economy and you really need to be able to be efficienct - is not a time to let go of the people that most know how to make your company work and put the other workers in a position where they're going to prefer to work elsewhere.  This move has all the hallmarks of a 'bonus driven layoff'.  The timing, the broad cuts, etc...  You focused on where the focus is: Shareholders.  Shareholders, as you note, are short term driven.  Companies that truly thrive, and that run products with long term viability, don't allow the short term to ignor the long term.  Companies grow in two ways: When you increase the resources generated per component used to generate resources, or when you add components that generate more resources than they consume.  They do not grow by removing components of success.  People are components of the company.</blockquote>

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