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Recently, an interesting phenomenon has been worth noting—many large companies are starting massive layoffs under the banners of AI and automation. The reasons sound very reasonable—mainly to improve efficiency and reduce costs. However, this logic seems to have completely failed in the capital markets.
Data shows that the stocks of companies announcing layoffs typically decline by about 2%, with some involved in restructuring experiencing even deeper drops. This is a complete reversal of past situations—where layoffs were seen as a positive signal of a company's self-reinvention, they are now generally understood as a bad omen.
What is the fundamental reason? The market perceives more honestly than the CEOs themselves. Companies that choose large-scale layoffs are often facing heavy debt burdens, high interest expenses, and sluggish profit growth. In other words, layoffs are not strategic upgrades but forced, passive responses. Compared to competitors that haven't implemented large layoffs, these companies are clearly struggling more.
So when CEOs confidently claim that this is an inevitable shift in the AI era, investors are thinking: this guy might really be at the end of his rope. The market is always more honest than superficial words.