Nasdaq · January 20, 2023
When layoffs read as good news
+2.66%
single-day change vs previous close
Part of a longer stretch
The AI boom rally
early in it · 2022-12-28 → 2024-02-29, +57.56% over the whole period
What happened that day?
- The Nasdaq rose 2.66% on the day
- Large technology companies announced heavy layoffs that week, one of them in the tens of thousands
- Layoffs reading as good news looks odd, but the market's worry in this period was cost
- These firms had hired enormously during the pandemic on the premise that demand would keep growing. The premise was wrong
- Layoffs are the admission of that and the reversal of the cost base. The market read it as a signal that profits would recover
- The advance that began here ran to February 2024. Artificial intelligence would only be named as the reason months later
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.