It’s not that we’re not making profit, it’s that we’re not making ENOUGH profit.
This. I’ll be the last one to defend any of these megacorps but folks calling it greed are being reductive. These are publicly traded companies which means their loyalty is to their shareholders and their #1 goal is to make them more money than they made them last quarter. So it’s more than greed, it’s their job within this capitalist system. They have to do that every quarter for as long as they exist. The only ways to do it are to increase revenue or decrease costs. If they can’t make enough money they have to fire people. That’s the world we’ve built.
But it’s not only about making more profit than last quarter, but also the amount the profits increased by has to be higher than the amount they increased by the quarter before last. That’s how you end up with companies seeing record profits and still laying people off. They made more than last quarter, but only 2% more. The quarter before they made 3% more so now people have to go. It’s insane.
pure corporate greed.
i think its the stock market. it creates this false reality where things need to keep climbing.
if you have a company where everyone gets paid, and the customer is very satisfied and you have no profit you are somehow a complete failure. because we all just cant be.
the stock market is humanities downfall… human greed distilled, authorized and removed from all responsibility.
There’s some off-base comments here that ignore why the industry is being hit particularly hard. Note that when it comes to companies like Microsoft, you’re right it’s pure greed. They don’t need to shed those jobs, but that will make shareholders money, so bye-bye livelihood. Fuck Microsoft in particular on this round of layoffs, money for a 65 billion purchase but nothing else, pricks.
But for most of the job losses, it really comes down to high interest rates. High interest rates disincentivizes investing. And the past decade or so has been highly investment based.
A lot of the traditional big publishers like EA and Activision went entirely in-house, so any studio outside of those big ones needed to find funding somewhere. They turned to investment companies.
This works whilst investing is cheap, but when it’s hard to come by, suddenly you have to make payroll and can’t. This is why Embracer has failed, for example.
Why were people laid off by Microsoft? Were they redundant after the acquisition? Were they part of departments that were cut? Like 90% of acquisitions lead to layoffs.
But Microsoft told the FTC they specifically were not gonna do that after the merger, which is why the FTC is angry at them. https://www.polygon.com/24065269/ftc-microsoft-activision-deal-layoffs-appeal
Very true, and Microsoft in particular could have just shouldered the cost of those employees and likely found more work for a lot of them. Some of what I’ve heard from Jeff Grubb in the past week or two is that ABK expanded by 3000 employees in the past two years while interest rates were cheap, so it was unlikely they did so sustainably; and hundreds of those who were laid off were basically the entirety of Microsoft’s physical distribution department, which we’ll probably hear in this upcoming business update no longer exists for Xbox going forward.
Plenty of profit to go around. The issue is shareholders expect infinite growth, which is impossible.
Capitalism (when it works best) basically requires occasional market crashes that can “reset” the wealth distribution. But for obvious reasons, nobody wants that.
So every year, shareholders get richer and expect bigger growth next year, but eventually the profits will plateau. And one can only guess what happens then.
When the profits plateau, you look for the next thing the market wants. Sometimes those bets are right, and sometimes they’re wrong. In the meantime, people were paid salaries out of investors’ pockets while they worked on providing the next potential answer. That’s what happened here.