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Xbox claims mass layoffs were the outcome of a ‘concerning’ lack of industry growth
(www.videogameschronicle.com)
this post was submitted on 27 Mar 2024
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Is no growth really as bad as these business types claim? Or is it just limited to publically traded companies?
No growth would be fine in any normal head for a company that is making that kind of absurd amount of money anually, for capitalist investors tho they dont want money, they want more money each year and all the money everyone has.
No growth is bad for the investors/stakeholders who make money from that growth, so the issue is probably more pronounced in public companies, but definitely not limited to them.
The whole point of investing is to get a return on the money invested. The reason you choose to put money into one investment over another is you expect to have a higher rate of return than the alternatives.
If a company comes out and says, "We don't plan to grow and, by the way, you shouldn't expect a return on your investment" then people will pull their money out and invest elsewhere. As soon as that happens the company goes belly up because they're all leveraged against their stock.
These companies can still provide a return on investment without growth (just maintaining profit margins will do that) but nothing happens in a vacuum. If there's an alternative investment that is growing and producing more return, people will put their money there instead.
I sincerely doubt that this is the only way to go about it though. I am sure a lot of investors like sustainability, reliable and regular income more than exponential short-term growth. What's baffling to me is that business types whine about their line not going up but never understand it's because of their short-sighted decision.