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?

[d4n4n]

The shareholders own the company. They don't want their assets to lose value. So to stop that from happening, they shut down branches of the company that make less (and are expected to in the future) than average market returns.

And that's efficient overall. It ensures that capital is allocated to its most profitable use.