this post was submitted on 05 May 2025
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Sure they could claim the labour, but they also have to pay for that labour. If they were going to make a 100k profit, they might have to pay 30k in tax, pocket 70k. But if they spent 100k on labour, they then make a $0 profit and pay no tax. But they pocket nothing.
For a company that can't manipulate governments, paying tax is a good thing. It means you made a profit.
For work coming in, imagine they have 50 salaried staff. Costs them X per year. US economy tanks and now they have no work. They could make these staff redundant, pay them a bunch of redundancy money. Or they could keep them on the books and pay them to do nothing. Or a third option, take on work even though they are only covering say 80% of what it costs, under the assumption that doing this for a year is cheaper than paying redundancy.
Hard to say what the actual argument was for spending the money without knowing the discussion around the decision.
I've absolutely seen companies take on work at break even, or even at a loss, just to keep staff employed and the business ticking over through a quiet patch.
Can you imagine how hard it must be to hire someone with the skills those Wētā Workshop folk have? I expect there's a really good reason to tide over a downturn with some work to keep the team busy if you have hope over the horizon.
Oh, absolutely. There would be people there with decades of experience in a very niche field, and if you let them go, you'll likely never get them back.