If you’ve ever wondered why tech stocks like Google or Meta seem to rise after layoffs, it comes down to how compensation and restricted stock units (RSUs) work. Let me explain:
At big tech companies, base salaries aren’t usually the eye-popping part of compensation. The “500k total comp” you hear about often includes RSUs, which are a major part of pay packages. These stock grants are designed to align employees’ incentives with the company’s success. For example, Tim Cook’s 2024 salary was $3M, but his RSUs added over $50M to his total earnings.
Here’s how it ties into layoffs:
RSUs vest over time. Employees don’t get the full value of their RSU grant immediately. Instead, they vest gradually over 4+ years.
Layoffs stop RSUs from vesting. When an employee is laid off, their unvested RSUs disappear, saving the company money.
Fewer shares hitting the market. When RSUs vest, employees often sell the shares to diversify their investments. This creates selling pressure on the stock, which can lower its price. Fewer RSUs vesting = less selling pressure = better stock performance.
In some cases, companies strategically lay off employees with significant unvested RSUs to save costs and stabilize stock prices. That’s one reason layoffs happen even when companies are profitable, like Google’s 2023/2024 cuts.
Even better, big tech is starting to reduce its reliance on RSUs altogether, favoring salary and bonus structures. This reduces future stock dilution and keeps investors happy, further driving up share prices. They’ll probably start paying dividends or something once that happens. The carrot is always to raise share price which is why you see Zuck lying about AI agents when his Gen models can barely comprehend things or Salesforce claim they’re not hiring when their job board is literally overflowing. Those are just free things you can do verbally to raise share price. They’ll literally do anything to raise it. Give up their dignity and start wearing a gold chain and get a new curly haired gen Z haircut, do election interference.. and especially fire you.
So the next time you see a profitable company announcing layoffs, it’s not always about cutting costs, it’s also about managing RSU-related expenses and boosting shareholder value.
TL;DR: Layoffs in Big Tech often reduce RSU liabilities and selling pressure on stocks, which makes Wall Street happy. It’s a win for shareholders, but not so much for employees.
The more you know.🌈🌈
submitted by /u/phoggey
[link] [comments]
r/cscareerquestions If you’ve ever wondered why tech stocks like Google or Meta seem to rise after layoffs, it comes down to how compensation and restricted stock units (RSUs) work. Let me explain: At big tech companies, base salaries aren’t usually the eye-popping part of compensation. The “500k total comp” you hear about often includes RSUs, which are a major part of pay packages. These stock grants are designed to align employees’ incentives with the company’s success. For example, Tim Cook’s 2024 salary was $3M, but his RSUs added over $50M to his total earnings. Here’s how it ties into layoffs: RSUs vest over time. Employees don’t get the full value of their RSU grant immediately. Instead, they vest gradually over 4+ years. Layoffs stop RSUs from vesting. When an employee is laid off, their unvested RSUs disappear, saving the company money. Fewer shares hitting the market. When RSUs vest, employees often sell the shares to diversify their investments. This creates selling pressure on the stock, which can lower its price. Fewer RSUs vesting = less selling pressure = better stock performance. In some cases, companies strategically lay off employees with significant unvested RSUs to save costs and stabilize stock prices. That’s one reason layoffs happen even when companies are profitable, like Google’s 2023/2024 cuts. Even better, big tech is starting to reduce its reliance on RSUs altogether, favoring salary and bonus structures. This reduces future stock dilution and keeps investors happy, further driving up share prices. They’ll probably start paying dividends or something once that happens. The carrot is always to raise share price which is why you see Zuck lying about AI agents when his Gen models can barely comprehend things or Salesforce claim they’re not hiring when their job board is literally overflowing. Those are just free things you can do verbally to raise share price. They’ll literally do anything to raise it. Give up their dignity and start wearing a gold chain and get a new curly haired gen Z haircut, do election interference.. and especially fire you. So the next time you see a profitable company announcing layoffs, it’s not always about cutting costs, it’s also about managing RSU-related expenses and boosting shareholder value. TL;DR: Layoffs in Big Tech often reduce RSU liabilities and selling pressure on stocks, which makes Wall Street happy. It’s a win for shareholders, but not so much for employees. The more you know.🌈🌈 submitted by /u/phoggey [link] [comments]
If you’ve ever wondered why tech stocks like Google or Meta seem to rise after layoffs, it comes down to how compensation and restricted stock units (RSUs) work. Let me explain:
At big tech companies, base salaries aren’t usually the eye-popping part of compensation. The “500k total comp” you hear about often includes RSUs, which are a major part of pay packages. These stock grants are designed to align employees’ incentives with the company’s success. For example, Tim Cook’s 2024 salary was $3M, but his RSUs added over $50M to his total earnings.
Here’s how it ties into layoffs:
RSUs vest over time. Employees don’t get the full value of their RSU grant immediately. Instead, they vest gradually over 4+ years.
Layoffs stop RSUs from vesting. When an employee is laid off, their unvested RSUs disappear, saving the company money.
Fewer shares hitting the market. When RSUs vest, employees often sell the shares to diversify their investments. This creates selling pressure on the stock, which can lower its price. Fewer RSUs vesting = less selling pressure = better stock performance.
In some cases, companies strategically lay off employees with significant unvested RSUs to save costs and stabilize stock prices. That’s one reason layoffs happen even when companies are profitable, like Google’s 2023/2024 cuts.
Even better, big tech is starting to reduce its reliance on RSUs altogether, favoring salary and bonus structures. This reduces future stock dilution and keeps investors happy, further driving up share prices. They’ll probably start paying dividends or something once that happens. The carrot is always to raise share price which is why you see Zuck lying about AI agents when his Gen models can barely comprehend things or Salesforce claim they’re not hiring when their job board is literally overflowing. Those are just free things you can do verbally to raise share price. They’ll literally do anything to raise it. Give up their dignity and start wearing a gold chain and get a new curly haired gen Z haircut, do election interference.. and especially fire you.
So the next time you see a profitable company announcing layoffs, it’s not always about cutting costs, it’s also about managing RSU-related expenses and boosting shareholder value.
TL;DR: Layoffs in Big Tech often reduce RSU liabilities and selling pressure on stocks, which makes Wall Street happy. It’s a win for shareholders, but not so much for employees.
The more you know.🌈🌈
submitted by /u/phoggey
[link] [comments]