Same process: A company announces major layoffs

[question everything]

and its stock rises.

I remember this during the early 90s recession and this was how Bob Schieffer reported on CBS News: GM announced a major layoff and the whole market went up, actually registering a positive gain for the year!!

If so many employees are losing good paying jobs, or having to take a major pay cuts, who would be able to purchase the GM products?

I just don't understand this economy. Corporations are sitting on cash - be be used for merger and acquisitions, not to hire more people or to raise their pay. Income level is down.. who will be able to purchase products and services that are being offered?

[NorCalDem]

1. You're lookin too far ahead!

Right now it's just a money grab!

:evilgrin:

[orwell]

2. Labor...

...is usually 50 to 70% of any company's costs. So if you can cut jobs and get the same output, you get higher productivity per worker. Frequently, that is why the market bids up the stock.

[sam sarrha]

3. due to Greenspans formula they have to merge to remain in good standing

it a company cant grow 100% in 8 or 10 years without killing other companies and outsourcing the jobs, very shortly there will only be 4 textile manufactures in the usa..

wont be long before all corporations will merge into one.. and it will OWN the government.. and we get a barcode tattooed on our necks