That’s mythology: executives have no such obligation to either shareholders or the board because business decisions are very rarely unambiguous wins or losses, and a great deal of discretion is given to their judgement over any non-trivial timeframe.
Consider, for example, the number of people who thought turn of the century Apple should become a Windows reseller or, later, sell the iPod brand to a business which understood how to be successful in the phone market like Nokia. There were certainly times where that could have generated a great deal of short-term gain, and it was easy to find some analyst prattling on about why they had to do it.
In the case of Spotify, the only situation where 17% of their company is an unambiguous waste of money with no benefit to the future business should be accompanied by the CEO’s resignation because that would be an enormous managerial failure in the hiring process. Since it seems unlikely that even 1% of their workforce is that bad, it’s far more likely that this has nothing to do with long-term success and everything to do with pleasing the activist investors and consulting firms who’ve been pushing the idea of layoffs as a way to remind workers not to ask for more.
Consider, for example, the number of people who thought turn of the century Apple should become a Windows reseller or, later, sell the iPod brand to a business which understood how to be successful in the phone market like Nokia. There were certainly times where that could have generated a great deal of short-term gain, and it was easy to find some analyst prattling on about why they had to do it.
In the case of Spotify, the only situation where 17% of their company is an unambiguous waste of money with no benefit to the future business should be accompanied by the CEO’s resignation because that would be an enormous managerial failure in the hiring process. Since it seems unlikely that even 1% of their workforce is that bad, it’s far more likely that this has nothing to do with long-term success and everything to do with pleasing the activist investors and consulting firms who’ve been pushing the idea of layoffs as a way to remind workers not to ask for more.