Another Company Trades AI Layoffs For Stock Price
Another Company Trades AI Layoffs For Stock Price
Douglas A. McIntyreWed, May 27, 2026 at 4:15 PM UTC
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seewhatmitchsee / iStock Editorial via Getty ImagesQuick Read -
Is It AI, Or Just A Way To Save Money?
Layoffs Help Stock Price
But Do Layoffs Go Too Far?
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Groupon didn't make the cut. Grab the names FREE today.
It has become a pattern. A public company lays off employees and says it has found new efficiencies due to AI. Its stock trades higher immediately. This happened yesterday. The job loss count was modest. Groupon (NASDAQ: GRPN) cut 400 people, but the cut was high relative to its overall employee count. It employs a total of 1,700 people. Groupon also raised its earnings outlook for the year. The stock moved up 10%.
A cynic might say Groupon made the move because its stock had performed so poorly this year until a few days ago. (These pre-announcement stock moves are old at stock market time.)
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Groupon didn't make the cut. Grab the names FREE today.
The stock run-up happened just in time. First-quarter earnings were mediocre. Revenue was flat at $117 million. The company had a net loss of $13 million compared with a profit of $7 million in the year-ago period.
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The “layoff helps stock” narrative got its big start when Block (NYSE: XYZ) cut 40% of its workers. That took its total from just over 10,000 to 6,000. Speaking of AI tools, Chief Operating Officer Amrita Ahuja said, “It feels like the acceleration is actually only quickening and we are seeing, really, an inevitability at this point around productivity gains and what that means for us as a business.” If this continues to work so well, Block’s employee count might eventually come close to zero.
One of two things happened. Both have gotten a good deal of press and analysis. Either companies are using AI as an excuse to lay people off to improve margins, or AI is as powerful as Groupon, Block, and dozens of other companies say. Either way, hundreds of thousands of people have their jobs on the line. The Wall Street Journal recently did a long analysis titled, “Phoenix Built an Empire of Cubicle Jobs. AI Is Coming to Tear It Down.” It implied that the economy of America’s fifth-largest city could be partially dismantled.
Groupon is another company that begs the question of whether it, and a few other companies, are the tip of the AI iceberg. That is written about every day in 247WallSt pages. And, the opinions on bath sides are well-reasoned. So well reasoned that AI may soon be the primary debater.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Groupon didn't make the cut. Grab the names FREE today.
Source: “AOL Money”
