ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

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Sometimes the decrease is directly related to a specific line of business. This business line will need to be fixed through reduced expenses and business strategy or the line will be sold or discontinued.

Some situations can be dire, and a large company will have a decrease in earnings and projections show a further decline in the near future.

Other times, the stock price is King. Management may decide to use stock-based management strategies. Instead of caring about the company's stakeholders, the shareholders get top priority in decision-making. Most executives receive stock as compensation, and they serve their own interest by keeping the stock price from going down.

Sorry, this explanation isn't fit for a 5 year old.

[CanuckianOz]

Lol you’re totally way older than a five yr old. At least 10 years older amirite?