Experts: If a Company You Invest In Does Layoffs, Should You Sell Your Stocks?

Full quote provided:

“Announcing layoffs may be related to a large move in a stock price. At times, companies seem to announce layoffs in response to poor results marked by a sharp decline in their stock price. The announcement is an effort to cut costs and satisfy institutional investors. It is not necessarily a sign of doom for the company.

Poor management tends to look only a few quarters ahead. Sudden layoff announcements can be a sign that management is too short-sighted. However, they are often effective and can serve to get a company back on track. At Magnifina, we look beyond the short-term and target investments for a 3-5 year horizon. We find this investment approach to be more stable and that it performs better over the long-term."