Wall Street Journal: Layoffs = bad stock?
Interesting MarketWatch column in today's Journal: "Why investors may do well with firms that avoid layoffs". The spur: Wall Street's negative reaction to this week's announcement from Intel of a less-than-expected 10,000 layoffs. This is all too typical of the market, cheering on more bloodletting. But investors, as opposed to short-term traders, might be wise to view mass layoffs suspiciously. They are rarely an example of wise management.
In fact, some studies have shown that big layoffs have no long-term impact on a company's stock. As the article notes:
Maybe that is because, cost-cutting, for the sake of cost-cutting to appease Wall Street, is also the result of companies scrambling to show a profit or to continue to show a profit. It also suggests mismanagement by companies as they try to reignite their growth.
The sad truth is that as was the case for IBM, these layoffs signal the end of Intel's great run. Its monopoly grip is loosening, and its leaders and circumstances behind its early growth are gone... That is nothing for investors to cheer about.
One day perhaps, the perception that layoffs are bad news, not good news, will be common knowledge on Wall Street. Nothing could do more to sober up Corporate America from its current layoff addiction.
Technorati Tags: layoffs, outsourcing
posted by Tech Guy @ 6:17 PM
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1 Comments:
Looks like Intel is dumping the tech guys they dont need and rehiring others.
Intel stealth hiring spree outed
Graphic offers
By Theo Valich in Satan Clara: Monday 18 September 2006, 16:43
INTEL CONTINES its slither back to the business of graphics manufacturing.
The corporation may be shredding 15,000 employees from different departments, but it calls no halt on hiring for the upcoming branch of its portfolio.
Intel claimed some time ago that its main rival is not AMD, but Nvidia. And the boys in blue want to alter its perception as the leading maker of graphics chips that can't run anything more complex than Excel - as one graphics engineer told us several years ago.
There are some flaws in Intel's stealth recruitment drive, however. One of those is called Human Resources Department.
It seems human resourcers at Intel have been sending out e-mails willy-nilly in order to entice folk away from their comfortable posts.
Some graphics specialists have even received missives from more than one Intel recruiter.
One name already, in fact, on Intel's payroll, received two "Uncle Intel wants You!" offers from two different people in a spread of 24 hours.
Things are heating up in the Valley of Silicon. ยต
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