ServiceNow (NOW) plans to cut up to 1,000 jobs, and its stock went up on the news.
That reaction surprised many people, given that layoffs usually signal trouble
Yet NOW’s stock price climbed toward $111 after the plan surfaced, up about 9% over five trading sessions. The stock had fallen more than 24% year-to-date before the rally because investors had spent months worried that AI would eat into the software ServiceNow sells. The job cuts, paired with a strong second-quarter report, directly pushed back against that fear.
So the question for investors holding or considering buying ServiceNow is simple. Why did cutting jobs make this stock more attractive? Why ServiceNow cutting 1,000 jobs pushed NOW stock higher The cuts equal about 3% of ServiceNow’s global workforce, Investing.com reported after speaking with people familiar with the plan.