Bonafide retard here on my first DD and corporate lemming reporting in.
Mass layoff rumors are circulating online about Allstate going through some massive layoffs. These giant companies are frequently hiring mass amounts of people and just saying "USE AI!!!" in an effort to understand and actually implement things that might be helpful to the business. Couple that with below average performance in areas like claims, subsidiaries, and vendor-lock ins with huge capex and and you've got yourself into a situation.
In my experience with layoffs I've always been frustrated when the stock price goes up when they're laying off people but hanging out with you retards has made me realize this makes sense so here's why I think it does:
If the completion of their layoff cycle ends on November 13th, followed up with the 60-day notice period ending approximately January 12th, this puts their stock price increase right before their Q4 earnings announcement in Q1. The timing is suspect but I guess to other people this is obvious but idk.
It may have already priced in but idk to the degree of full consequences... if people are thinking like me then they see it as a cost-cutting measure. What may be different here IMO is that the magnitude of this could be underestimated now with the investments into AI that are happening across the board at all companies like this.
I could also see if in Q1 2027 they project financial guidance based purely off of this timing. Q4 could still show them spending money on the people being laid off along with all the fallout from that but Allstate has been a good company for a long time finance wise. By the time the earnings call rolls around the whole cycle should be complete.
So imagine you're management. You can walk into a presentation and show that the historical expense of Q4 and the significantly lower projection in 2027. The whales don't care about today they care about future earnings. If they can demonstrate that the costs have permanently declined (we restructured, removed redundancies, kept operations normal, this is fine) then they'll be forced into this viewpoint.
Again I want to re-iterate there's no way the layoffs aren't priced in, I'm arguing that it's underestimated. There's also the possibility that the damage of the layoff isn't in the price since it's likely a bunch of useless claims reps and ai "pioneers".
Anyways, first DD ever so excited to be roasted and maybe learn something