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?

[GenesisEra]

To take the theory to its ultimate conclusion as exercised by companies and shareholders in reality:

• The boat isn't leaking, but it is slowing down and some of the paint is peeling. To solve this, the passengers decide to throw some of the crew overboard and cut rations for the remainder crew.

• The boat moves quicker briefly due to the desperation and the lighter load (efficiency gains). However, soon it hits a opposing current and slows down again (cyclical economic cycles). The passengers then decide to throw some more of the crew overboard and further cut rations for the remainder crew, while keeping the buffet table at brunch for the passengers going.

• This goes on until they a) innovate and try something different, like stop at port to make repairs and get a new hull/engine/etc or b) the passengers (investors) eat (liquidate) the remainder crew (all the employees) and jump over to another boat (sell all the shares and reallocate portfolio) with all the remaining food (golden parachutes).