While FAANG stocks are mostly in the spotlight today due to earnings, Autodesk (NASDAQ:ADSK) carved out a spot of its own on Friday. Shares of ADSK stock opened lower on the day and fell 3.1% at the session low after headlines hit of new Autodesk layoffs.
The firm announced that it will slash its workforce by 250 members, joining a long list of other firms to do so this year. Rivian (NASDAQ:RIVN) recently comes to mind, but many companies big and small have resorted to workforce reduction.
Autodesk said it is “focused on ensuring that our resources remain well-aligned to support our key priorities for the coming year.” It will also continue to hire for other key positions.
In November 2022, there was a record number of layoffs in the tech space. In January 2023, the sector smashed that record, but the trend continues. And now, Autodesk is a part of that trend within tech.
Are Autodesk Layoffs Hurting ADSK Stock?
Shares of ADSK stock have recouped some of today’s losses and are now only down 1.5%. But the price action likely has more to do with the broader market than the actual Autodesk layoffs.
For the most part, technology stocks have been rewarded with job cuts. It points to less spending and higher margins. Further, investors hope it’s simply a “trimming the fat” process and it won’t harm productivity.
The reality is that while the overall economy continues to chug along quite nicely, the tech space has been struggling. Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) all reported disappointing earnings on Thursday evening.
Then on Friday morning, investors received a much-hotter-than-expected jobs report. That stoked fears of the Federal Reserve increasing its interest rate outlook, which is a negative for tech stocks.
Put it all together and today’s selling pressure in ADSK stock is likely not tied to the Autodesk layoffs. In fact, it equates to less than 2% of the firm’s global workforce. Instead, it’s tied to the volatility we’re seeing in tech and it’s being driven by FAANG.
It doesn’t help that in just over a week, ADSK stock rallied more than 17%. That wasn’t driven by earnings or any other material change. Simply a wave of momentum in tech made it ripe for some profit taking.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.