Document Type
Blog Post
Publication Date
5-24-2012
Contents
HP announced on May 23 that it will cut 27,000 jobs (see article). In class I asked students what they thought happened to the stock price. Most thought the price would drop since this is a negative indicator. However, the stock price actually rose 2.2% from its prior day close, while the market was flat. The issue is efficiency (and margin). If HP can sell the same amount with fewer employees, earnings will be higher--which translates to higher growth (and therefore market value).
Recommended Citation
Dolvin, Steven D., "HP Cuts Jobs, Stock Price Rises" (2012). All Chapters. 5.
https://digitalcommons.butler.edu/jmdallchapters/5