In many cases, the best decision for the firm is the one that directly undermines the company it controls.
How though? I don’t doubt this is a real thing, but there isn’t really a satisfying explanation being offered here. What the article is saying sounds like the process is, take profitable business, throw in garbage, somehow more profit. Where’s the money coming from?
Short version - Layoffs increase short term profits, then you let the business die to sell off the assets. This is generally considered a safer strategy than long term investing because it doesn’t require expertise and you get paid quicker (compared to buying a company and waiting 5+ years to turn a profit on the purchase).
How though? I don’t doubt this is a real thing, but there isn’t really a satisfying explanation being offered here. What the article is saying sounds like the process is, take profitable business, throw in garbage, somehow more profit. Where’s the money coming from?
Look up private equity and corporate raids.
Short version - Layoffs increase short term profits, then you let the business die to sell off the assets. This is generally considered a safer strategy than long term investing because it doesn’t require expertise and you get paid quicker (compared to buying a company and waiting 5+ years to turn a profit on the purchase).