Post by prantogomes141 on Feb 13, 2024 21:44:10 GMT -8
Some of the most prominent American companies have been slashing jobs recently, particularly in the technology sector. In January, there were over 75,000 layoffs in the tech industry alone, signaling a worsening outlook. However, are these companies facing imminent risk to profitability? Some, like WeWork and Spotify, had negative EBITDAs. Others, like Microsoft, earned nearly $10 million (EBITDA) for every worker laid off. Key Takeaways Amazon had $2.8 million in earnings (before interest, taxes, depreciation, and amortization – or EBITDA) for every staff member they laid off in January. Meta had $3.9 million in earnings for each of the 11,000 staff members they laid off in November. In response to Meta’s cost-cutting strategy, its stock price increased by 19 percent. Tech giant Microsoft had an EBITDA of $98.8 billion in 2022.
This means they earned $9.8 million for each person they laid off in January 2023. Other companies’ layoffs weren’t as difficult to Algeria Telemarketing Data understand: WeWork ended 2022 with an EBITDA of -$824 million, and Spotify ended its fiscal year with an EBITDA of -$290 million. Why Did Profitable Companies Lay Off Workers? 2022 wasn’t an easy year for many companies, but we’re seeing the earliest and largest layoffs coming from Big Tech. Those are some of the country’s most successful companies – over the past few years, it seemed like they could do nothing but win. When looking at the 2022 EBITDAs of these uber-successful companies, it’s hard to fathom why layoffs may have been necessary.
EBITDA, a measure of company profits that ignores interest, taxes, depreciation, and amortization, fell over the past year for many of the biggest tech firms, such as Google, Amazon, and Meta (formerly known as Facebook). That’s a tough pill to swallow for companies whose huge valuations rely on very high growth rates. Though performance looks strong at many of these companies, profits declined year over year at several of them. Much of it concerns one of the year’s most-discussed issues: rising interest rates. Large tech companies saw a lot of money flow into their stock prices because federal interest rates were so low for a long time. With low-interest rates, investors take more risks to get a return on their dollar, like investing in equities and real estate.
This means they earned $9.8 million for each person they laid off in January 2023. Other companies’ layoffs weren’t as difficult to Algeria Telemarketing Data understand: WeWork ended 2022 with an EBITDA of -$824 million, and Spotify ended its fiscal year with an EBITDA of -$290 million. Why Did Profitable Companies Lay Off Workers? 2022 wasn’t an easy year for many companies, but we’re seeing the earliest and largest layoffs coming from Big Tech. Those are some of the country’s most successful companies – over the past few years, it seemed like they could do nothing but win. When looking at the 2022 EBITDAs of these uber-successful companies, it’s hard to fathom why layoffs may have been necessary.
EBITDA, a measure of company profits that ignores interest, taxes, depreciation, and amortization, fell over the past year for many of the biggest tech firms, such as Google, Amazon, and Meta (formerly known as Facebook). That’s a tough pill to swallow for companies whose huge valuations rely on very high growth rates. Though performance looks strong at many of these companies, profits declined year over year at several of them. Much of it concerns one of the year’s most-discussed issues: rising interest rates. Large tech companies saw a lot of money flow into their stock prices because federal interest rates were so low for a long time. With low-interest rates, investors take more risks to get a return on their dollar, like investing in equities and real estate.