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News of layoffs in the tech sector aren’t abating, and if anything, they’re picking up steam. Sirius XM (NASDAQ:SIRI) has once again generated headlines in this regard today, announcing the company has already let go of around 3% of its workforce. News of these Sirius XM layoffs has sent SIRI stock modestly higher in today’s session, up a little more than 2% at the time of writing.
These layoffs, which will impact roughly 160 individuals, encapsulate a wider-ranging initiative taken on by various tech companies to get more efficient. Leaner and meaner is the name of the game, and Sirius XM appears intent on driving continued efficiency gains to boost the company’s ability to generate higher profits.
Let’s dive into this announced round of job cuts and what it could mean for both investors in SIRI stock, as well as growth investors focused more broadly on the tech sector.
SIRI Stock Rises on Announced Sirius XM Layoffs
The search for agility, flexibility and efficiency is on, with companies across the tech spectrum scrambling to provide investors with better returns on capital. In the case of Sirius XM, a company that’s already profitable (with a rather attractive valuation multiple of 15 times earnings and a 2.2% dividend yield), it’s unclear whether this latest round of cuts was necessary.
That said, it appears the market is cheering this news. The company’s decision to eliminate certain roles may suggest some bloat within the company’s business model. This idea is furthered by the fact the company already laid off roughly 475 employees in a round of layoffs last year.
To date, the market reaction to companies cutting headcount remains mixed. Investors in SIRI stock may want to pay attention to how the company’s growth rates are, or are not, affected by this most recent cut in the coming quarters. For now, this is a stock investors will certainly want to keep an eye 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.