Sure it can. If the executives want to hit their performance bonuses they might start axing lower revenue projects or support groups. In a higher rate environment, it's certainly possible that the decision is made to lay people off to reduce the higher cost debt that needs to be incurred or the time it will take to pay it off, even if the company is otherwise profitable.not saying that's the case here though.

Of course there are other likely causes of layoffs, like a downturn in industry forecast for particular types of games, their next product didn't test well (or can't charge what they wanted), etc.

> If the executives want to hit their performance bonuses they might start axing lower revenue projects or support groups

This is not a reaction to an FTC case.

It is if the settlement affects their finances.

IIUC, Epic Games is private so they only need to convince Tim not to ax their bonuses and not the wider stock market.

Although I mean if you're the executive overseeing the devision where users got overcharged perhaps your bonus did deserve to be ax'd.

Even at private companies the performance targets/bonuses are set in the contract, no? Yeah, if you were the cause of the suit, then you definitely shouldn't be getting anything.

> Even at private companies the performance targets/bonuses are set in the contract, no?

For senior management? Usually not.

If you hit it out of the park, the Board rewards you at its discretion. It isn’t until a company is mature enough that even senior managers don’t meaningfully affect the whole that performance targets are worth drafting. (Executives on performance targets early are a red flag.)

> if you were the cause of the suit, then you definitely shouldn't be getting anything

Sunk cost. Question is going-forward risk and return potential.

"Sunk cost. Question is going-forward risk and return potential."

Basically the only way people evaluate you is pn past performance. If you made a bad judgement call resulting in these sorts of penalties, you're likely out.

"For senior management?"

For executives.

> if you made a bad judgement call resulting in these sorts of penalties, you're likely out

If you’re likely to make them again and/or don’t bring enough counterbalancing value to the table. If it came out of thin air it’s performative to punish. There’s a good Lee Iacocca quote about this somewhere.

> For executives

Senior management and executives are the same thing in a general context. (Another is upper management.)

"If it came out of thin air it’s performative to punish."

Nothing comes out of thin air, unless you're saying the fines are bull shit.

"Senior management and executives are the same thing in a general context."

Depends on how big the company is. At my company senior management is at least a level below the executive level.

> unless you're saying the fines are bull shit

I’m saying not everything can be anticipated, and everything is in balance. A Board that fires everyone proximate to a fine will seal its own fate.

> At my company senior management is at least a level below the executive level

That’s middle management rebranded. It’s fine! I’ve done this! But the same way someone with a director title isn’t a director of the company, someone who reports to anyone other than the CEO is not senior management.

There are certainly situations where an adverse result in a lawsuit can lead to layoffs despite being a “one-off event”. I’ve worked on at least a few that were genuine “bet the company” cases. But a $245M loss is typically not in the ballpark for a big company. To trigger layoffs you usually need to be talking about billions or injunctions.

The total is more like 500mm. If I recall, it was 250mm for refunds, and 250mm in penalties. It's a large amount of $$$

Edit: to be clear, it's the largest fine the FTC has ever imposed, it is a historically large amount of $$$