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their stockprice would make a big jump if they could manage to lay off 110k people. I think it would be a good thing, to streamline their operation.

by bring1 12y ago

jacquesm 12y ago
You do realize you're talking about 110k people losing their income? Including dependents (averaging 2.4 / wage earner) that means this would affect ~ 250K people plus those laid off so 350K people. Funny definition of a 'good thing', there is more to life than stocks.
- stainednapkin 12y ago
  Yes, "good" can mean many things depending on what the person saying it believes.
- stavrianos 12y ago
  I inferred a "for IBM" on the back of that sentence. Obviously, shitty for those laid off.
  - 31reasons 12y ago
    IBM is not a live entity it is composed of people.
    - anonbanker 12y ago
      International Business Machines is a stack of paper registered out of Delaware. The fact that people are employed by this stack of paper does not mean the stack of paper has a soul. to prove this, note that their stock was up on the rumor of 110k layoffs. Other stacks of paper without souls caught wind of this stack of paper reorganizing, and promptly bought shares.
      - bodyfour 12y ago
        nitpick: they're actually registered in New York, not Delaware.
  - fluffheadsr 12y ago
    this guy is whats wrong with corporate america.. screw you and your cubicle..
- outside2344 12y ago
  I hear what you are saying but if it means than 330k people still with IBM can keep their jobs (as opposed to the whole thing going under) it could be a good thing.
- swatow 12y ago
  It would be a good thing because following the principal of maximizing profits is what is most socially beneficial, in the absence of externalities. And jobs are not an externality. You have only calculated one side of the equation. You haven't considered how investors would have reinvested that money, and the jobs that this would have created. We can and should develop a theoretical framework that allows us to predict both sides of the equation. Such a framework exists and is called general equilibrium theory, which predicts that profit maximizing companies maximize social utility.
  - jsprogrammer 12y ago
    Does the framework predict monotonic utility growth? Does profit maximization occur instantaneously? Does it provide any guarantees on the timeframe required to experience maximal social utility?
    - swatow 12y ago
      >Does the framework predict monotonic utility growth? I don't understand that question. I know the language of economics very well, but you're not using the terms in way that has an obvious meaning. >Does profit maximization occur instantaneously? Time is not really an issue in general equilibrium theory. E.g. the assumptions can be interpreted as saying that all companies make the decision that, at that time, given all information available, maximizes the expected value of the companies future time discounted dividends. >Does it provide any guarantees on the timeframe required to experience maximal social utility? Social utility is timeless. E.g. it can be restated to say that if you were to make a plan (where plan can include contingencies, e.g. if X happens, do Y) to maximize the (time discounted) total social welfare over all future time periods, then this plan would involve instructing all companies to maximize profit (in the sense of my answer above). Basically, general equilibrium theory takes into account time, by adding dynamic programming. But this augmented theory is fundamentally the same as the theory when all consumption, production and trade occurs in one instant. Minus all the econ jargon, I think you may have been hinting at the adjustment costs for the workers involved. There are indeed adjustment costs, but you can't speak about these costs in the same terms as the actual value of having a job. It's like comparing the cost of moving from one home to another, to losing one's home entirely.
- tptacek 12y ago
  Hundreds of thousands of other people, like teachers and firefighters, depend on returns from companies like IBM to fund their retirements. If IBM can't profitably retain employees, holding onto them anyways comes at the expense of all the shareholders, not just the ones with cigars and monocles.
tim333 12y ago
>their stockprice would make a big jump Assuming they has 110k people doing nothing much important. I rather doubt that. IBM isn't that badly managed.

their stockprice would make a big jump if they could manage to lay off 110k people. I think it would be a good thing, to streamline their operation.

by bring1 12y ago

their stockprice would make a big jump if they could manage to lay off 110k people. I think it would be a good thing, to streamline their operation.

jacquesm 12y ago

You do realize you're talking about 110k people losing their income? Including dependents (averaging 2.4 / wage earner) that means this would affect ~ 250K people plus those laid off so 350K people. Funny definition of a 'good thing', there is more to life than stocks.

stainednapkin 12y ago
Yes, "good" can mean many things depending on what the person saying it believes.
stavrianos 12y ago
I inferred a "for IBM" on the back of that sentence. Obviously, shitty for those laid off.
- 31reasons 12y ago
  IBM is not a live entity it is composed of people.
  - anonbanker 12y ago
    International Business Machines is a stack of paper registered out of Delaware. The fact that people are employed by this stack of paper does not mean the stack of paper has a soul. to prove this, note that their stock was up on the rumor of 110k layoffs. Other stacks of paper without souls caught wind of this stack of paper reorganizing, and promptly bought shares.
    - bodyfour 12y ago
      nitpick: they're actually registered in New York, not Delaware.
- fluffheadsr 12y ago
  this guy is whats wrong with corporate america.. screw you and your cubicle..
outside2344 12y ago
I hear what you are saying but if it means than 330k people still with IBM can keep their jobs (as opposed to the whole thing going under) it could be a good thing.
swatow 12y ago
It would be a good thing because following the principal of maximizing profits is what is most socially beneficial, in the absence of externalities. And jobs are not an externality. You have only calculated one side of the equation. You haven't considered how investors would have reinvested that money, and the jobs that this would have created. We can and should develop a theoretical framework that allows us to predict both sides of the equation. Such a framework exists and is called general equilibrium theory, which predicts that profit maximizing companies maximize social utility.
- jsprogrammer 12y ago
  Does the framework predict monotonic utility growth? Does profit maximization occur instantaneously? Does it provide any guarantees on the timeframe required to experience maximal social utility?
  - swatow 12y ago
    >Does the framework predict monotonic utility growth? I don't understand that question. I know the language of economics very well, but you're not using the terms in way that has an obvious meaning. >Does profit maximization occur instantaneously? Time is not really an issue in general equilibrium theory. E.g. the assumptions can be interpreted as saying that all companies make the decision that, at that time, given all information available, maximizes the expected value of the companies future time discounted dividends. >Does it provide any guarantees on the timeframe required to experience maximal social utility? Social utility is timeless. E.g. it can be restated to say that if you were to make a plan (where plan can include contingencies, e.g. if X happens, do Y) to maximize the (time discounted) total social welfare over all future time periods, then this plan would involve instructing all companies to maximize profit (in the sense of my answer above). Basically, general equilibrium theory takes into account time, by adding dynamic programming. But this augmented theory is fundamentally the same as the theory when all consumption, production and trade occurs in one instant. Minus all the econ jargon, I think you may have been hinting at the adjustment costs for the workers involved. There are indeed adjustment costs, but you can't speak about these costs in the same terms as the actual value of having a job. It's like comparing the cost of moving from one home to another, to losing one's home entirely.
tptacek 12y ago
Hundreds of thousands of other people, like teachers and firefighters, depend on returns from companies like IBM to fund their retirements. If IBM can't profitably retain employees, holding onto them anyways comes at the expense of all the shareholders, not just the ones with cigars and monocles.

tim333 12y ago

>their stockprice would make a big jump Assuming they has 110k people doing nothing much important. I rather doubt that. IBM isn't that badly managed.