The real reason is "make number go up". A few years ago, you showed the stock market (or your investors if you weren't listed yet) how amazing a company you were by hiring people like crazy, even if you didn't need them, and giving them all sorts of perks, including (but not limited to) home office. Now, the stock market wants to see blood, so you have to sacrifice people - not because you're actually losing money, but because you're not making as much profit as the stock market thinks you should, and therefore your shares are "underperforming".
This tactic is wearing thin on investors. All companies doing layoffs as of recent have started to lose share value. AI or not.
I think investors are starting to see stress on the market for fewer working people contributing back as customers and investors themselves. This creates depreciation in share value as no one is willing to invest.
It helps to think of investors in tiers. The lower tiers mimic higher ups. Each tier has two orders of magnitude deeper pockets than the lower tier.
At the very top are the big investment banks and fund houses, berkshire. Second are smaller institutions and third retail/individual.
The top two layers demand a steady return, never losing money on average in any 36 month window. Otherwise it triggers a selloff top down to cover for it.
The bottom follows the top so the selloff or buy just gets mimicked, with the top tier never losing (the bottom layers make sure of it by following blindly)
With wild indicators already set a massive selloff should have already been in motion, but its not. The top tier is getting more greedy.
No one is betting on AI long term. Everyone's in for the ride. As always the bottom will feed the top.
this “square wave” effect is driven by interest rates … when the bank rate is very low investors will tolerate high level of gambling on growth (ponzi-like). as soon as money will grow anyway in the bank, then investors demand actual RoI