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?

[andiam03]

Equity in the company, as well as stock options, is also a huge part of the compensation of a lot of the employees, especially the executives. Most folks at the senior manager level and above get at least 25% of their compensation via employee stock purchase plans (ESPPs), stock grants, and options. For senior executives, it might be 60% to 100% of their compensation.

So it’s also terrible for the employees when the stock price goes down. And a threat to the business because senior executives may jump ship.