One of the most volatile stocks in the market over the past year is Bed Bath & Beyond (NASDAQ:BBBY). A popular retailer that saw an impressive short squeeze, shares of BBBY stock have gone from a 52-week high of $30 per share to roughly 85 cents per share today. That’s including an impressive 8% move higher in this stock today.
Today’s move appears to be tied to additional job cuts at various locations in New Jersey. It’s expected that more than a thousand workers at the company’s Port Reading, Secaucus and Union locations will “be made redundant” by the middle of April.
Layoffs won’t be limited to store staff either. The company will shutter an additional Harmon health and beauty store in Totowa. This will result in more than 260 additional job cuts. Notably, Bed Bath & Beyond had already made the decision to liquidate these stores earlier this year.
With more cost-cutting efforts underway, the market appears to be taking this news positively today. Let’s dive into what investors may want to make of this price action in BBBY stock right now.
BBBY Stock Surges on Additional Job Cuts
Generally speaking, in most markets, job cuts aren’t a good thing. When a company decides to lay off a significant portion of its workforce, that generally means business, or the broader economic outlook, isn’t great.
Interestingly, that appears to be the case for Bed Bath & Beyond. This retailer, like many of its peers, faces unfavorable macro conditions. Additionally, balance sheet weakness and other company-specific factors have led to concerns about the company ultimately going bankrupt, with equity investors left holding the bag.
These job cuts are welcomed by investors who are constantly pricing the probability of default risk into this stock. We’ll have to see how Bed Bath & Beyond is able to navigate these trying times. However, the market is providing most companies the license to eliminate jobs, which management teams are jumping on.
On the date of publication, Chris MacDonald 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.