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Cake day: March 3rd, 2024

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  • Profit would be appropriate if it were earmarked to offset difficult future fiscal periods, so that the business could continue to operate in lean times without having to punish employees through layoffs or failure to keep up with cost of living or cutting back on other benefits.

    But we all know that’s not what happens. Owners never have to experience consequences; customers and employees always do, for things that they have no control over.




  • It’s not needless pedantry. Revenue is the income acquired before costs, and those costs include employee compensation. Reducing the number of employees has zero immediate effect on revenue. A company with US$10B in revenue can still be losing money if their expenses are higher than revenue.

    This is important to point out, because reporting very often uses the wrong metric to describe a company in comparison to its behavior. Revenue is rarely the correct metric, and mentioning it as a comparator in this article makes the issue less clear.

    Note that I am not defending CrowdStrike here. Hell, they’re the ones saying that layoffs are going to magically increase revenue:

    According to CrowdStrike, the layoff plan is part of a bigger plan to improve different operations and processes and achieve the final goal of $10 billion in revenue by the end of the year.

    ‍ “[Layoffs represent] a strategic plan (the ‘Plan’) to evolve its operations to yield greater efficiencies as the Company continues to scale its business with focus and discipline to meet its goal of $10 billion in ending [Annual Recurring Revenue].”, the CrowdStrike company mentioned in their 8-K filing.

    I’m no paragon of business, but I fail to comprehend how having fewer employees is going to make your sales go up. Maybe they’re laying off salespeople, which puts the fear of god in those who are left as a “motivator”? Laying off people who perform the services they sell seems counterproductive in relation to revenue.

    They’re being intentionally misleading about this, and pointing that out is not pedantry.