So you're getting shit canned to save the company money?
Weirdly, not at all. I'll explain the details and hopefully not bore you because I think it's quite the hilarious story of our economy:
The way finance works is you have a sell side and a buy side for all market activities. The sell side "makes the market" by pulling together the, for example, equities in advance that people want through an IPO. The buy side is the investor, like a hedge fund where I work. (Aside) The sell side is usually a bank and has a lot of other roles in the market, but almost all are what IMO should be considered market "stewardship" not straight market capitalism. But, what do I know?
Now a buy side investor (e.g. hedge fund) makes many trades and holds many instruments in what's called a portfolio. And an institution maintains multiple portfolios. They then manage and market these portfolios separately. In the same way a bank, for example, markets a saving account with a 0.00002% interest rate to you. The marketing message is basically: "Portfolio X represents our Y strategy and had a return of Z% this year." So the number Z becomes part of the brand and reputation of the fund. But what if Z is below market (i.e. what if other hedge funds are offering better return for similar exposure)? In that case, people will
eventually put their money elsewhere.
So why is that important? Because we made profit (i.e. my costs and everyone else's costs are covered and there are millions of dollars going into the owners' pockets). Z was positive and our investors made money. But they could have made even more money if they had given it to a different hedge fund, i.e. take their business elsewhere. And so, eventually, they will move their money. That means our long-term viability, assuming nothing changed, is negative. But, in the short term, the owners literally throw away profit. Meaning they don't save money by shutting down the division, they lose it.
The hope is that you can correct things so the short-term profits stay and the long-term viability is addressed. The problem is that that is a political exercise. People want their own teams and their own visions. Currently, one of the new visions is to not do one of the major strategies anymore. Hence killing off all the people associated with it.
But the part I find to be (darkly) funny is the paragraph before the last one, where the only problem is that they could have made even more money. And the consequence of that justifies 20+ people losing their jobs.
