The Financial Environment of Layoffs: A Descriptive Study
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung
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in: Journal of Strategic Management (Korea: 전략경영연구), Jahrgang 2, Nr. 1, 1999, S. 121-145.
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung
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TY - JOUR
T1 - The Financial Environment of Layoffs
T2 - A Descriptive Study
AU - McKinley, William
AU - Schick, Allen G.
AU - Sun, Huey-Lian
AU - Tang, Alex P.
PY - 1999
Y1 - 1999
N2 - This study examines the financial environment of layoffs in large corporations, a topic that has received limited empirical attention. Based on the diverse, sometimes inconsistent arguments in previous layoff and downsizing literature, we formulate four research questions about firm financial performance in the years preceding and following layoffs. We then answer those questions with data from a study of 210 layoff announcements and associated firm financial performance trends. The results suggest that average firm financial performance declines significantly prior to a layoff, and that financial performance increases significantly following a layoff, but only in the first year. Furthermore, relatively large layoffs are preceded by larger declines in financial performance, and followed by larger increases in performance, than small layoffs.
AB - This study examines the financial environment of layoffs in large corporations, a topic that has received limited empirical attention. Based on the diverse, sometimes inconsistent arguments in previous layoff and downsizing literature, we formulate four research questions about firm financial performance in the years preceding and following layoffs. We then answer those questions with data from a study of 210 layoff announcements and associated firm financial performance trends. The results suggest that average firm financial performance declines significantly prior to a layoff, and that financial performance increases significantly following a layoff, but only in the first year. Furthermore, relatively large layoffs are preceded by larger declines in financial performance, and followed by larger increases in performance, than small layoffs.
KW - Management studies
M3 - Journal articles
VL - 2
SP - 121
EP - 145
JO - Journal of Strategic Management (Korea: 전략경영연구)
JF - Journal of Strategic Management (Korea: 전략경영연구)
SN - 1226-8437
IS - 1
ER -