DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
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Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#2Going to say the obvious, knowing nothing about this situation:
If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board.
Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.
This happens in normal markets and helps to ensure companies continue to exist into the future and don't bleed out. Defunct companies can't employ anyone.
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#3Going to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.…
The legal standard is not to "maximize profits."
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#4Going to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.…
They're firing people cause of a meme, not cause anyone made a business case as you are implying.
A meme: that times are tough and firing people will free up capital.
It's a meme my boy. people are losing their jobs cause CEOs need to "make tough decisions".
They're not doing business evaluations. They're following the herd. A meme.
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#5Going to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.…
This is an oft repeated misrepresentation. In the US, case-law shows there is a fiduciary duty to the corporation itself, not the shareholders. And there are no laws or regulations which require the maximization of profits.
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#6Going to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.…
The legal standard is not to "maximize profits."
You are correct. I was wrong on the standard. They have a duty insofar as they know shareholders will replace them via voting power if they displease the majority of their shareholders, and generally shareholders want to increase value or dividends. However, that's not always the case. Shareholders could generally desire anything else. Thank you for the correction.
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#7Going to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.…
This is an oft repeated misrepresentation. In the US, case-law shows there is a fiduciary duty to the corporation itself, not the shareholders. And there are no laws or regulations which require the maximization of profits.
Yes, I was wrong. This helped to clear it up.
https://skeptics.stackexchange.com/questions/8146/are-u-s-co...
That said, voting shareholders could replace management if they deemed them to act differently than they think the next best candidate could. So there is some risk in deciding not to try and maximize the short or long (depending on voters) value of the company.
This helps to explain why the index giants like Vanguard are getting away with pushing their nonsense ESG on companies.
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#8This is dramatic even for Twitter
Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#9Going to say the obvious, knowing nothing about this situation: If the company is public, it has a fiduciary duty to it's shareholders to maximize profits, which means that management should act to reduce the workforce if they feel that portion returns less in profit than it costs to keep on board. Private companies have more leeway, unless of course they have contractual obligations to uphold with private investors.…
They're firing people cause of a meme, not cause anyone made a business case as you are implying. A meme: that times are tough and firing people will free up capital. It's a meme my boy. people are losing their jobs cause CEOs need to "make tough decisions". They're not doing business evaluations. They're following the herd. A meme.
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Re: DigitalOcean Profits Up, More Stock Buybacks, but lays off 11% anyways
#10Lots of ESG hires who aren't doing shit other than organizing "events" and finding issues to complain about, this is dead weight.