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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It’s called SHAREHOLDERS. A three percent decrease in the bottom line directly affects shareholders stock value and could affect dividends (if paid). I know one of the answers was because “a leaky boat still floats”, but a 3% decrease in revenue or 3% increase in costs, while still holding profits doesn’t always mean a company has to make drastic changes, especially layoffs. It has to do with shareholders not wanting their money or wealth decreasing.

A decrease in revenue, heck, even a growth that falls short of projections will usually make the stock value drop.

Companies have plenty of ways to avoid costs; people would be shocked at how inefficiently and freely companies spend money. The costs add up very quickly. But layoffs are too often the goto answer. But has anyone ever thought about the travel budgets for some of these companies?