Draghi Speaks, Euro Falls Off Chart, Stocks Soar Despite Layoffs, Shrinking Revenues, and Evil “Strong Dollar” that just Got a Heck of Lot Stronger

Friday, October 23, 2015
By Paul Martin

by Wolf Richter
WolfStreet.com
October 22, 2015

There has been a litany of layoff announcements recently: Biogen said yesterday that it would axe 11% of its people. ESPN would lay off 4% of its people. Twitter a couple of days ago said it would slash its workforce by 8%. Microsoft and HP are currently very busy shedding tens of thousands of workers.

Caterpillar announced over 10,000 layoffs last month. Intuit kicked off a new round of layoffs this summer. Permanently troubled former highflyer Groupon is laying of 1,100 folks. Even startups. Zomato, based in India, is laying of 300 folks, many of them in the US. Flipagram laid off 20% of its workers. And on and on. Even Snapchat.

It isn’t a coincidence: It’s tough out there. S&P 500 companies have been reporting shrinking revenues for what will be three quarters in a row (Q1, Q2, and Q3) and declining earnings for what will be two quarters in a row (Q2 and Q3). Q4 is shaping up to be no better. Unless a miracle happens, 2015 is going to be the worst year in that respect since the Financial Crisis.

So layoffs are a logical response from a corporate point of view.

Also – and this isn’t a coincidence either – it’s going to be a banner year for M&A. Alas, an M&A boom always triggers a relentless corporate chase after the promised “synergies” and “efficiencies” between the two combined companies. Hence more layoffs.

Layoffs are a lagging indicator for corporate troubles.

The Rest…HERE

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