The fastest way for tech companies to lift their share price, seems to be laying off workers, if you look at the correlation between the number of workers sacked and the spike in a company’s stock.
Australian tech companies have been taking a leaf out of the playbook of their US counterparts with Xero last week axing 15% of its workforce, and seeing a 10.3% jump in its stock by the end of the week.
Earlier this month, US-listed Atlassian shed 500 staff (5% of its workforce).
Its shares are higher by about 40% year to date.
The Australian tech companies are following in the footsteps of the likes of Meta, Microsoft, Apple and Amazon which have all undergone significant staff cuts.
Despite shares of these companies getting smashed in the 2022 tech wreck, big tech has been on the upwards march in 2023, riding high on job cuts.
So as it turns out, staff cuts are bad for individuals, but good for business - and investors don’t seem to care much about the tech, all they want is a “slimmer” model.
And with the introduction of ChatGPT, can these tech companies slim down even more?
Company |
Market cap |
YTD price change |
Atlassian |
US$43.57B |
+34.38% |
Xero |
AUD$12.95B |
+23% |
Meta |
US$471B |
+45.65% |
Microsoft |
US$1.88T |
+5.32% |
Apple |
US$2.38T |
+20.40% |
Amazon |
US$945.31B |
+7.49% |