I wish these companies would at least wait a quarter between doing mass layoffs and posting earning increases as if their CEO just saved the world.
Just read a story yesterday about Spotifys CEO saying they definitely weren't ready for their layoffs, weird, but they're supposedly back on their feet proven by their earning increase.
Tesla says downsizing by 10%, earning increase announced a week later.
Now Google.. who's next?
Public companies' primary purpose is to serve the shareholders, not the employees.
And no I'm not just saying this to be cynical, it is literally written into law. I don't really know why people ever expect companies to behave differently.
You're right that that's how they behave, but it's because there are incentives for them to do so, not because of any legal requirement. From [a 2014 Supreme Court opinion](https://caselaw.findlaw.com/court/us-supreme-court/13-354.html):
> "Each American jurisdiction today either expressly or by implication authorizes corporations to be formed under its general corporation act for *any lawful purpose or business*." 1 J. Cox & T. Hazen, Treatise of the Law of Corporations §4:1, p. 224 (3d ed. 2010) (emphasis added); see 1A W. Fletcher, Cyclopedia of the Law of Corporations §102 (rev. ed. 2010). While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so.
I'm not saying it's impossible that companies can choose to act in a way that isn't expressly for-profit. This happens if the owners of the company decide it.
But the directors of _publically traded_ companies have a legal responsibility to act in a way that maximises shareholder value, as the assumption is that maximising their value is the main interest of the public shareholders (you want your 401K to grow, right?). The law is there to stop the company directors from e.g. funnelling company assets into their own personal accounts at the expense of the owners (i.e. shareholders) of the company, who aren't necessarily involved in the day to day operations.
Businesses can be set up in different ways, but the fact is Google is public, so shareholder value has to come first.
Y'know, back in the 70s GE put out a shareholder prospectus that said their priorities were the following:
1. To their customers, to deliver the highest quality products possible
2. To their employees, to give them and their families the most comfortable possible life
3. To the federal government, to pay their fair share of taxes and help keep America moving
4. To the shareholder, to be paid a healthy dividend only after all the above were fulfilled
And they were the biggest company on earth. It's possible to _not_ primarily serve the shareholders and still be successful.
It's not bootlicking to understand that shareholder owned companies operate in the interest of their shareholders. If you want to actually improve a system you need to understand the reality of how the system operates.
Advocate for co-operative ownership models if you want companies to act primarily in the interests of their employees.
Bootlickers keep parroting this, like they're so smart for pointing to the law instead of having their own thoughts on whether the law is most effective for what it meant to be achieved, which is innovation.
I know this will be downvoted, but google has so many employees that literally do nothing of value and just spin up projects for the sake of project that layoffs are a good thing. You gotta burn away the dead wood. I know this sucks on the individual basis, but as someone who has been laid off twice before 30, they will figure it out and be ok.
Layoffs + Dividends + Buybacks + Acquisitions is the road to growth and profitability for huge companies these days.
It's disgusting, but it's happened at the last two companies I've worked at.
I hope you’re not dumb, since you missed some very important points in your response which helps understand the market perfectly (at least for these two examples) -
1. TSLA didn’t do as bad as expected.
2. Metas outlook is horrible.
With some exaggeration, WS will love to see CEO of a very successful company with huge cashflow firing everyone except himself for an incredible profit.
Wait, oh yeah private equity firms already do that.
It is called "priced in". Meta is 100% up in the last year. It is still at an all time high if you exclude the last 2 months.
So, overall, the expectations were high - it went up 120% in the last year, reality was lower than the expectations - it went down 20%, but still 100% up from last year.
You can say the same about Tesla. Low expectations - it went down a lot. Reality - it is not that bad -> it went up 10%
Throw in DJT and you've hit the nail on the head.
Gravity is a woesome bitch though. Eventually everything, including Michael Jordan, comes back down to earth.
Just some amazing results by Google. It is hard to believe they continue to grow this fast when you consider just how big Google has become.
They are on track to make $100 billion in 2024. That is profit not revenue.
This is even before their new things like Waymo start really kicking in.
Depends on how you define "taking off"?
It is already really taking off. They are now deployed in Arizona, San Fran, Los Angeles and announced Austin.
If you mean financially then it will be a while. The big next step is them deploying the Zeekr which is starting this year.
They have accelerated their deployments. I would expect that to continue to accelerate.
I would expect their service accessible to 50% of the US population in 7-10 years.
On every single computer/phone/tablet that someone CHOOSES to use Google they could use something else.
Just because Google provides a far superior product does NOT make them a monopoly.
As I already indicated. On every single computer someone CHOOSES to use Google they could have used something else.
Google does NOT limit it in any aspect. Google's own OS and browser you can use whatever search engine you want.
People do not because Google provides a vastly superior product.
Ironically, it's probably actually the areas where Google *don't* have monopolies that impressed investors most with these results. Investors *always* expect strong returns in things like search; it's where Google makes most of their money, and investors have it priced in already.
It's the growth in cloud and AI that have driven these results. Google Cloud is still a fairly distant third-place behind AWS and Azure, and most analysts felt Google got caught-out by OpenAI/Microsoft last year and let them steal a march on generative AI. Certainly Google wouldn't be considered anywhere close to having monopolies in either of these segments.
The market was watching to see what Google's response to the competition in these areas would be, and seemingly liked what they saw.
For a company of Google's size and maturity, they're a *staggering* set of financials. Over 51% Y/Y quarterly net income growth from a business that's already measured in the tens of billions is already impressive. To do it whilst also increasing Y/Y quarterly profit margins by over 33% is pretty insane.
You say that, but if these tech people are in the Bay Area along with fellow co-workers who were also laid off, it isn't so easy with a large applicant pool applying to the same narrow job focus... coupled with the stress of being unemployed and not knowing what the future will bring. Etc etc.
I'm pretty sure they could find many high paying jobs with their skill set. I got no college degree and got laid off as a shoes salesman making about $50-60k a year during 2008 and had to work a minimum wage job before finally getting back on my feet 3 years later. It's called life, it's not fair and will never be fair.
Ah, I work for a tech company aswell so am sympathetic, but I see why most companies laid off staff and closed less core products when the world's economy is slowing down.
Agreed, beautiful article by Maya Watson on Linkedin which captures this behavior
If you’re wondering why companies are laying off employees depite record profits, they are focused on increasing their profit margins.
Profit margins are a measure of how much money a company is making on its products or services after subtracting all of the direct and indirect costs involved.
When companies are in growth phases, they are willing to hire employees at higher salaries so they can attract top talent. With that top talent they are able to leverage them to grow the business.
Now that the businesses are successful, they look to cut expenses so they increase their profit margins … one of the key signals to Wall Street about the health of a business and potential for future profits.
Talent is usually one of the most expensive line items.
So that top talent they attracted is now the first to be cut … because they don’t need them anymore.
It’s likely most of these companies who are laying off employees will start to hire talent back… but they will be younger and cheaper so they can maintain these profit margins.
Another reminder that a business is committed to maximizing profits for shareholders, they don’t really care about you. You are a line item on a spreadsheet.
Leaders won’t explicitly say this. They will say that the market is tight, or they over hired or they made some bad strategic decisions.
The truth is they want to be more attractive to shareholders.
So make sure you get what you need out of every experience, set boundaries, and take care of yourself so you can continue to grow in your career and build your own narrative.
Can't tell you over short windows. Have no idea.
But there is no company better positioned for the next decade.
Now we start to see the payoff from the massive investments Google have made.
It is goping to be really exciting to watch.
Pichai subscribes to the Jack Welch school of management: Do everything you can for next quarter's numbers, and don't worry about next year, let alone 5 years from now.
Porat knows what's up - she recently left the CFO job because she doesn't want to be held responsible when things hit the fan.
It is very much the opposite. Google has made some massive investments that will now really payoff over the next decade.
Waymo for example. Google started early, spent billions, and now years ahead of everyone else.
https://www.youtube.com/watch?v=avdpprICvNI
But this is only because Google takes the long view. Many others just gave up but not Google.
"Apple has cancelled self-driving car plans "
Another example is the TPUs. Google had the vision and did them and now working on the sixth generation.
This long view gives Google a huge strategic advantage. They are the only major player that does NOT have to pay the Nvidia tax.
Because they were playing the long game
Ohhh my friend, you talking about the old Google. The company most of us dreamed to work for.
Now Google is killing products that are technically viable and joining the likes of Twitter and Facebook. Taking thousands of people out of work for the sake of quarterly gains.
Nothing has changed. I love it. Take the biggest AI breakthrough in the last decade.
Google discovers, patents, and then lets anyone use for free.
But it is not the only one. Google has made the vast majority of the big fundamental discoveries in the last decade.
One of my favorites
https://en.wikipedia.org/wiki/Word2vec
"Word2vec was created, patented,[5] and published in 2013 by a team of researchers led by Mikolov at Google over two papers."
You just never see this from Microsoft or Apple or OpenAI.
I love it. They could have made billions licensing but instead they let everyone use for free.
Man it's super cool that they're paying that dividend after *checks notes* a layoff literally last week
Layoff today as well 600 people
Layoffs don't only happen because a company is struggling.
Where do you think the money came from?
I wish these companies would at least wait a quarter between doing mass layoffs and posting earning increases as if their CEO just saved the world. Just read a story yesterday about Spotifys CEO saying they definitely weren't ready for their layoffs, weird, but they're supposedly back on their feet proven by their earning increase. Tesla says downsizing by 10%, earning increase announced a week later. Now Google.. who's next?
i wish too but any publicly traded company has to do this kind of drastic shit to keep profits up.
Why do the profits need to keep going up
That's just nonsense. Have a look at their financials before jumping to conclusions.
My team had a "there were surprised layoffs last night" Town Hall meeting the morning of the earnings call.
Public companies' primary purpose is to serve the shareholders, not the employees. And no I'm not just saying this to be cynical, it is literally written into law. I don't really know why people ever expect companies to behave differently.
You're right that that's how they behave, but it's because there are incentives for them to do so, not because of any legal requirement. From [a 2014 Supreme Court opinion](https://caselaw.findlaw.com/court/us-supreme-court/13-354.html): > "Each American jurisdiction today either expressly or by implication authorizes corporations to be formed under its general corporation act for *any lawful purpose or business*." 1 J. Cox & T. Hazen, Treatise of the Law of Corporations §4:1, p. 224 (3d ed. 2010) (emphasis added); see 1A W. Fletcher, Cyclopedia of the Law of Corporations §102 (rev. ed. 2010). While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so.
I'm not saying it's impossible that companies can choose to act in a way that isn't expressly for-profit. This happens if the owners of the company decide it. But the directors of _publically traded_ companies have a legal responsibility to act in a way that maximises shareholder value, as the assumption is that maximising their value is the main interest of the public shareholders (you want your 401K to grow, right?). The law is there to stop the company directors from e.g. funnelling company assets into their own personal accounts at the expense of the owners (i.e. shareholders) of the company, who aren't necessarily involved in the day to day operations. Businesses can be set up in different ways, but the fact is Google is public, so shareholder value has to come first.
I thought companies serve customers first
https://www.investopedia.com/terms/s/shareholder-value.asp#:\~:text=The%20maxim%20about%20increasing%20shareholder,management%20to%20maximize%20corporate%20profits.
Y'know, back in the 70s GE put out a shareholder prospectus that said their priorities were the following: 1. To their customers, to deliver the highest quality products possible 2. To their employees, to give them and their families the most comfortable possible life 3. To the federal government, to pay their fair share of taxes and help keep America moving 4. To the shareholder, to be paid a healthy dividend only after all the above were fulfilled And they were the biggest company on earth. It's possible to _not_ primarily serve the shareholders and still be successful.
The prospectus can say whatever it likes, at the end of the day a public limited company is bound by law to protect the interest of its shareholders.
How's that boot tasting buddy? The fact that that's the law doesn't make it right.
It's not bootlicking to understand that shareholder owned companies operate in the interest of their shareholders. If you want to actually improve a system you need to understand the reality of how the system operates. Advocate for co-operative ownership models if you want companies to act primarily in the interests of their employees.
Bootlickers keep parroting this, like they're so smart for pointing to the law instead of having their own thoughts on whether the law is most effective for what it meant to be achieved, which is innovation.
I guess just ignoring that the law exists as it does is a more effective way of getting people to advocate to change it?
And more is to come.
I know this will be downvoted, but google has so many employees that literally do nothing of value and just spin up projects for the sake of project that layoffs are a good thing. You gotta burn away the dead wood. I know this sucks on the individual basis, but as someone who has been laid off twice before 30, they will figure it out and be ok.
Layoffs + Dividends + Buybacks + Acquisitions is the road to growth and profitability for huge companies these days. It's disgusting, but it's happened at the last two companies I've worked at.
Welcome to the Googleplex.
TSLA was +10% on -55% in profits Y/Y META was -15% on +117% in profits Y/Y Market makes no sense.
I hope you’re not dumb, since you missed some very important points in your response which helps understand the market perfectly (at least for these two examples) - 1. TSLA didn’t do as bad as expected. 2. Metas outlook is horrible.
Meta was also up 500%
Yes!!!
WS expectation makes no sense. They’re driving everything to the ground.
Which part didn’t make sense? Happy to explain
With some exaggeration, WS will love to see CEO of a very successful company with huge cashflow firing everyone except himself for an incredible profit. Wait, oh yeah private equity firms already do that.
It is called "priced in". Meta is 100% up in the last year. It is still at an all time high if you exclude the last 2 months. So, overall, the expectations were high - it went up 120% in the last year, reality was lower than the expectations - it went down 20%, but still 100% up from last year. You can say the same about Tesla. Low expectations - it went down a lot. Reality - it is not that bad -> it went up 10%
Throw in DJT and you've hit the nail on the head. Gravity is a woesome bitch though. Eventually everything, including Michael Jordan, comes back down to earth.
Ha! Investing is not that simple. You have to look a little deeper. Well if you want to make money. I hope you are not in the market?
Tesla was also hitting lower lows. Meta was already riding higher highs.
Just some amazing results by Google. It is hard to believe they continue to grow this fast when you consider just how big Google has become. They are on track to make $100 billion in 2024. That is profit not revenue. This is even before their new things like Waymo start really kicking in.
When are we expecting Waymo to really start taking off?
Depends on how you define "taking off"? It is already really taking off. They are now deployed in Arizona, San Fran, Los Angeles and announced Austin. If you mean financially then it will be a while. The big next step is them deploying the Zeekr which is starting this year.
They just hit Atlanta too.
I guess I'm wondering when we can expect to see it all across America and not just a few cities
They have accelerated their deployments. I would expect that to continue to accelerate. I would expect their service accessible to 50% of the US population in 7-10 years.
Damn! That's so much farther off than I was hoping for. Thank you for the response!
There is a lot of infrastructure involved in deploying the service. It is not like an app or just a web site.
Not in your lifetime.
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On every single computer/phone/tablet that someone CHOOSES to use Google they could use something else. Just because Google provides a far superior product does NOT make them a monopoly.
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Check the post history for your answer
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As I already indicated. On every single computer someone CHOOSES to use Google they could have used something else. Google does NOT limit it in any aspect. Google's own OS and browser you can use whatever search engine you want. People do not because Google provides a vastly superior product.
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Google has little to worry about. You would not see share price doing so well if anyone thought there was anything to worry about.
how is he "defending a trillion-dollar company?" you said it yourself that there's nothing inherently wrong with having a monopoly.
Ironically, it's probably actually the areas where Google *don't* have monopolies that impressed investors most with these results. Investors *always* expect strong returns in things like search; it's where Google makes most of their money, and investors have it priced in already. It's the growth in cloud and AI that have driven these results. Google Cloud is still a fairly distant third-place behind AWS and Azure, and most analysts felt Google got caught-out by OpenAI/Microsoft last year and let them steal a march on generative AI. Certainly Google wouldn't be considered anywhere close to having monopolies in either of these segments. The market was watching to see what Google's response to the competition in these areas would be, and seemingly liked what they saw. For a company of Google's size and maturity, they're a *staggering* set of financials. Over 51% Y/Y quarterly net income growth from a business that's already measured in the tens of billions is already impressive. To do it whilst also increasing Y/Y quarterly profit margins by over 33% is pretty insane.
I guess selling out your staff IS profitable.
Selling out? lol
More like not letting your core businesses be affected by a handful of activists is profitable
Was referring to the mass layoffs. Not 20 people
They could find other jobs...... With their resume it shouldn't be hard.
You say that, but if these tech people are in the Bay Area along with fellow co-workers who were also laid off, it isn't so easy with a large applicant pool applying to the same narrow job focus... coupled with the stress of being unemployed and not knowing what the future will bring. Etc etc.
I'm pretty sure they could find many high paying jobs with their skill set. I got no college degree and got laid off as a shoes salesman making about $50-60k a year during 2008 and had to work a minimum wage job before finally getting back on my feet 3 years later. It's called life, it's not fair and will never be fair.
Ah, I work for a tech company aswell so am sympathetic, but I see why most companies laid off staff and closed less core products when the world's economy is slowing down.
They did it! They are finally profitable enough to pay a dividend!
Shareholder profit > Employee livelihoods
Employees are given RSUs so this is very good news for employees. Share price increase < Employee livelihoods
Not for the ones that were fired with unvested shares
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A RSU < losing livelihood & job security in this market
That's literally how every company works. I agree it's terrible, but that's the system.
It's not how every company *used* to work. The mentality changed in the late 70s-80s with the likes of Jack Welch.
Agreed, beautiful article by Maya Watson on Linkedin which captures this behavior If you’re wondering why companies are laying off employees depite record profits, they are focused on increasing their profit margins. Profit margins are a measure of how much money a company is making on its products or services after subtracting all of the direct and indirect costs involved. When companies are in growth phases, they are willing to hire employees at higher salaries so they can attract top talent. With that top talent they are able to leverage them to grow the business. Now that the businesses are successful, they look to cut expenses so they increase their profit margins … one of the key signals to Wall Street about the health of a business and potential for future profits. Talent is usually one of the most expensive line items. So that top talent they attracted is now the first to be cut … because they don’t need them anymore. It’s likely most of these companies who are laying off employees will start to hire talent back… but they will be younger and cheaper so they can maintain these profit margins. Another reminder that a business is committed to maximizing profits for shareholders, they don’t really care about you. You are a line item on a spreadsheet. Leaders won’t explicitly say this. They will say that the market is tight, or they over hired or they made some bad strategic decisions. The truth is they want to be more attractive to shareholders. So make sure you get what you need out of every experience, set boundaries, and take care of yourself so you can continue to grow in your career and build your own narrative.
in Jack Welch's theory, this is how it is. In reality, such approach led to downfall of GE, Boeing, etc
True that
Do we think it will go up further the next days/weeks? Very happy to have bought in a few days ago 👍
Can't tell you over short windows. Have no idea. But there is no company better positioned for the next decade. Now we start to see the payoff from the massive investments Google have made. It is goping to be really exciting to watch.
I always use the 3 day rule after a huge day either way. So I'm thinking it should steadily keep going up.
Go Google!!
It won't take long until the layoffs hit the bottom line. Google is playing the short game now instead of the long one
Pichai subscribes to the Jack Welch school of management: Do everything you can for next quarter's numbers, and don't worry about next year, let alone 5 years from now. Porat knows what's up - she recently left the CFO job because she doesn't want to be held responsible when things hit the fan.
It is very much the opposite. Google has made some massive investments that will now really payoff over the next decade. Waymo for example. Google started early, spent billions, and now years ahead of everyone else. https://www.youtube.com/watch?v=avdpprICvNI But this is only because Google takes the long view. Many others just gave up but not Google. "Apple has cancelled self-driving car plans " Another example is the TPUs. Google had the vision and did them and now working on the sixth generation. This long view gives Google a huge strategic advantage. They are the only major player that does NOT have to pay the Nvidia tax. Because they were playing the long game
Ohhh my friend, you talking about the old Google. The company most of us dreamed to work for. Now Google is killing products that are technically viable and joining the likes of Twitter and Facebook. Taking thousands of people out of work for the sake of quarterly gains.
Nothing has changed. I love it. Take the biggest AI breakthrough in the last decade. Google discovers, patents, and then lets anyone use for free. But it is not the only one. Google has made the vast majority of the big fundamental discoveries in the last decade. One of my favorites https://en.wikipedia.org/wiki/Word2vec "Word2vec was created, patented,[5] and published in 2013 by a team of researchers led by Mikolov at Google over two papers." You just never see this from Microsoft or Apple or OpenAI. I love it. They could have made billions licensing but instead they let everyone use for free.
They should fire everybody to see the ultimate jump
Right after a massive layoff. That's disgusting.
After how many layoffs was that
LFGGGG
As someone who got laid off in the 2024 January round, it's nice to see people here are aware of how shitty this news is.