The Financial Environment of Layoffs: A Descriptive Study

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The Financial Environment of Layoffs: A Descriptive Study. / McKinley, William; Schick, Allen G.; Sun, Huey-Lian et al.
In: Journal of Strategic Management (Korea: 전략경영연구), Vol. 2, No. 1, 1999, p. 121-145.

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@article{482a7655f0614b77abda7687ae9ee0e8,
title = "The Financial Environment of Layoffs: A Descriptive Study",
abstract = "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. ",
keywords = "Management studies",
author = "William McKinley and Schick, {Allen G.} and Huey-Lian Sun and Tang, {Alex P.}",
year = "1999",
language = "English",
volume = "2",
pages = "121--145",
journal = "Journal of Strategic Management (Korea: 전략경영연구)",
issn = "1226-8437",
publisher = "Korean Strategic Management Society",
number = "1",

}

RIS

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 -