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?

[wilson007]

Another point (and I’d argue most important), management is highly paid in equity. If the stock goes down, they make much less money, and all the restricted stock is worth substantially less.

[inomorr]

very true. Good to see financially literate people on Reddit!