ARE MARKET PERCEPTIONS OF CORPORATE LAYOFFS CHANGING

We examine the response of stock returns to corporate layoff announcem ents for the 12-year period from 1981 to 1992. The results indicate a dramatic shift in the investors' perception of initiatives to reduce t he number of employees. While there were negative abnormal returns ass ociated with the announcements during the recessionary and boom period s of the 1980s, there are positive abnormal returns associated with th e announcements in the early 1990s. This evidence suggests that import ant structural changes in the U.S. labor market may be underway.