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Blackmist ,

CEOs will admit nothing.

Shareholders like to hear that employees are having to come to the office, being fired, or pissing in bottles. It means more money for the shareholders.

“Every hour we’ll beat our lowest performing employee with a pool ball in a sock.”

The line goes up.

stockRot ,

Why are shareholders happy to hear that businesses are spending unnecessary money on renting office spaces?

Blackmist ,

Because they also hold shares in the companies that rent offices.

None of these businesses have given up their office spaces. They’re also likely on very long term contracts. Not using them is wasting money.

HauntedCupcake ,

I agree with you, but want to point out that not using offices is just perceived as wasting money. They don’t actually lose any money if the office is used or not, they might even save money on utility costs and supplies. It’s just sunk cost fallacy.

el_abuelo ,

That’s correct, and the board doesn’t want to perceive wastage…so whoever is holding the bucket for entering into the lease will be pushing for mandated returns. This is likely the CEO or COO and so holds huge sway and likely ends up in said mandate being implemented.

My last company entered into a new lease during covid, while also making “the way we work has changed” noises. They then spent millions on the refit. And then were shocked that people weren’t coming in to admire their amazing space they’d just spent millions on.

SCB ,

Shareholders like to hear that employees are having to come to the office, being fired, or pissing in bottles. It means more money for the shareholders.

How would any of these things necessarily correlate to more money?

Blackmist ,

Because line goes up.

It doesn’t matter how profitable the company is. It only matters how much the people who want to buy your shares are prepared to pay for them.

SCB , (edited )

It doesn’t matter how profitable the company is. It only matters how much the people who want to buy your shares are prepared to pay for them.

Man I am not being mean here, I promise, but you need to hear this: Stop getting your worldview from memes.

These things you say are so wrong that unpacking them would take quadruple the space and effort of you saying them. If profitability doesn’t matter, why is there negative wage pressure from employers? Why is there a community called work reform??

Also the meme “line goes up” isn’t about businesses, it’s about global poverty.

Nollij ,

(Not OP) There is some truth to it, though. Profitability and stock price are, at best, loosely related. There was a time (possibly right now; I didn’t bother to check) where Tesla’s market cap (total value of all stock) was higher than the entire rest of the automakers combined. This is despite the former having only a fraction of sales, revenue, profits, and even projected sales of most of their peers. Much of this is a gold rush/pump-and-dump cycle, where earlier investors expect to profit from later investors.

That being said, I acknowledge your main point that it’s the perception of (future) profits that generally drives stock prices. Tesla is an exception. Most stocks move on more traditional drivers, such as value and growth.

I don’t see how forcing people back to the office will drive profits, though. Office space is expensive. At my employer (pre-COVID), it was over $500 per employee per month. That was the grand total for rent, HVAC, networking, etc. It was second only to salaries in terms of expenses. This is in a city that is regularly featured in the lists of most affordable places to live in the US. Is there some study (esp Gartner, since that’s what the suits blindly follow) that shows higher productivity in office?

AutistoMephisto ,
@AutistoMephisto@lemmy.world avatar

It’s a combination of things, really. Global markets and the Internet has changed how firms compete. They no longer compete to have more customers. Thanks to globalization and the Internet, the customer base for any given company is essentially infinite, or at least much bigger than firms need. What’s scarce is investment capital, and equity markets are growing more and more speculative as time goes on. Investors are buying, not on the expected dividends they’ll receive as a share of the profits, but on their ability to flip the stock to sell at a higher price, to another investor who are themselves expecting to flip the stock, there’s absolutely no regards to the fundamentals of the business. It’s like watching a group of house flippers buy all the properties in a neighborhood and flip them a little, then sell them to one another, and the property values just keep going up.

We saw this with D&D Beyond and Wizards of the Coast. A whistleblower from within the company said that the executives see the customers as an “obstacle to their money”. Under that mindset, you don’t have customers to serve, you have assets to monetize, and customers are preventing you from monetizing said assets.

Ilovethebomb ,

Poor thing doesn’t understand that companies pay their shareholders money, and the more profit they make, the more money they can pay their shareholders.

Ilovethebomb ,

It doesn’t matter how profitable the company is.

Do you know what a dividend is?

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