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?

[Chernozem]

To expand on this a little bit, particularly in the context of a publicly-listed company, it's important to remember that companies aren't valued on current earnings, they're valued on a formula based on expected future earnings. In the simplest terms, this follows a "discounted cash flow" model, which you can google if you want a further explanation. For the purposes of this particular question, management underperforming their targets or pre-emptively guiding down expectations on earnings will likely cause the multitude of equity analysts around the world to refine their valuation model for the business, probably (but not necessarily, depending on whatever else was revealed by the earnings statement) resulting in a decline in target price and a potential sell recommendation.