Among the three picks, SAP (SAP) is the most mature of the firms cutting jobs. Like IBM (IBM), it will cut a modest number of jobs. SAP will cut 3,000 jobs or 2.5% of its workforce. The firm faces macroeconomic pressures. It also faced net profit declines after it exited from Ukraine.
SAP sold 71% of its stake in Qualtrics to focus on the cloud business.
DraftKings (DKNG), an online sports betting site, is still developing its business model. The firm cut 3.5%, or 140 jobs, to increase operational efficiencies. DraftKings needs to grow its customer base by increasing its market share. It may no longer lose more money as it adds clients.
DraftKings could become profitable as it enters Massachusetts and Maryland. It may gain momentum in New York and Louisiana as sports viewership increases and betting volumes rise.
In the social networking market, Bloomberg reported that Pinterest will cut around 150 staff. After Snapchat (SNAP) posted weak advertising revenue, investors should expect a tough year ahead for Pinterest.
Job cuts help lower expenses. It will help the stock in the near term while weakening its prospects in the medium term. Firms will need to sustain customer service levels. It needs to support market share growth as the economy worsens. It will need a more efficient staff to achieve those goals.
