If their job is to make money for the shareholders, and quarterly reports show that they are either making less money, or incurring in losses, then they aren't doing their job.
They laid off people who had little to zero influence in defining the company mission, trying to cut spending. This suggests that the C-suite over-spent.
> Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable.
You can do both. A CEO would not need to lay off people if their long term plans worked accordingly, which means that they suck at their job. It's easy being the boss when everything goes fine and everyone buys your stuff. When things turn rough, these CEOs would issue a sorrowful apology, lay off tens of thousands, and still pocket hundreds of millions for the foreseeable future.
Let me put it this way. If I were to hire an engineer that writes 10x more code than the next, but all the code needs to be rewritten after a year because he made some very questionable decisions, I would definitely fire that guy.
Similarly, if I hire a CEO who hires 20,000 people, then lays 12,000 off after a year, I would have to question his ability as the head of the company.
It is not about being able to predict the future, at all.
Also, have I mentioned that most of these companies aren't posting losses? Or even problematic trends in their revenue reports?
>If I were to hire an engineer that writes 10x more code than the next, but all the code needs to be rewritten after a year because he made some very questionable decisions, I would definitely fire that guy.
thats dubious. did that code serve the purpose needed? did it provide enough value during that time to offset the cost of replacing it? I've written plenty of dubious code to get out a feature in front of a customer who would have otherwise left us. Sometimes that was it and we never had to touch it again. other times, more people would depend on it and the initial feature justified the resources to rewrite it. Its more complicated than "was the code bad." code is the product of the constraints at the time. that includes things like time sensitivity or budget.
Alphabet is absolutely posting troublesome trends in their revenue reports. Google ad results down, YouTube results down two quarters in a row… That’s what pays the bills at Alphabet.
I mean, the trend is downwards... If you take the anomaly of 2020-2021 into account [0]
Also, revenue is not down. Growth is. Apparently, we live in this stupid dystopia where growth is more important than money, even for gargantuan companies like Alphabet. How are they planning on growing at a >10% rate YoY forever?
You cited Alphabet revenue, not advertising or YouTube revenue.
> Google’s parent company, reported $59 billion in advertising revenue for the fourth quarter, a decrease of 3.6% from the same period in 2021. Those results marked the second time ad sales fell since Google became a publicly traded company in 2004.
> Google’s video platform, YouTube, recorded a second straight quarter of declining revenue for the three months through Dec. 31, with sales retreating 7.8% from the year-earlier period to $8 billion.
CEOs aren't mind readers. They have to make informed decisions about risks their company faces and act to neutralize those risks. If there was a 1% chance amazon would somehow be replaced by a startup if they don't spend 100 million dollars should they do it? I think the answer is obviously yes. Spending that money is not wasteful, it ensured the continued success of the company, even if the 99% outcome came to pass. The job of the CEO isn't to decide the probabilities here, it's to react to them.
But the problem with this whole mentality is that over hiring didn't really cost the companies that much, and furthermore, the issue has been addressed.
If I were a shareholder, why would I hold this against the CEO as long as the buybacks keep rolling in.
> quarterly reports show that they are either making less money, or incurring in losses, then they aren't doing their job
That’s a bad take. Companies can incur losses while the ceos do their jobs. Short term profitability and long term growth are both ceo responsibilities. If you take decisions to boost short term numbers to gut the company’s health over a longer term you should be fired. The exact myopic view led to destruction of airline and car rental companies stock in the last decade. Those ceos were not making money for the shareholders beyond the few quarters they “made money”.
Those are trends of company health, not performance metrics of the CEO. The performance metrics of the CEO is "In discovery of this down trend, what can we do to reorg the business and trim the fat so that we can turn this down trend upwards? (put together plan) (fires those that don't fit within that plan)". This is a good CEO. Maybe hated by those he/she fired, but loved by those who depend on the company to succeed (including those owned by the employees themselves).
If I'm making a garden with 10 folks and realize my yard is full of clay, why would I continue to employ gardeners when clearly it's time to build a pool? Should I lose my house because I couldn't make a garden? Or is my vision of a garden home incorrect for the current location and I must change my vision to match what the market/location is telling me?
Companies often build solutions to problems they know nothing about. Often they learn as they go. All research and market analysis points to this being the perfect place for a garden home so that's what we set off to create. But that was a few years ago when we did that market analysis and now the soil is clay. Ill suited for a garden without a lot of work and money to maintain it. It's time to change the direction of the home. You are right, maybe we shouldn't be doing gardening at all. Thank you for gardening with me (or attempting to). Your services are no longer needed here.
They laid off people who had little to zero influence in defining the company mission, trying to cut spending. This suggests that the C-suite over-spent.
> Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable.
You can do both. A CEO would not need to lay off people if their long term plans worked accordingly, which means that they suck at their job. It's easy being the boss when everything goes fine and everyone buys your stuff. When things turn rough, these CEOs would issue a sorrowful apology, lay off tens of thousands, and still pocket hundreds of millions for the foreseeable future.