ANNOUNCED LAYOFFS - THEIR EFFECT ON CORPORATE FINANCIAL PERFORMANCE

Authors
DEMEUSE KP VANDERHEIDEN PA BERGMANN TJ
Citation
Kp. Demeuse et al., ANNOUNCED LAYOFFS - THEIR EFFECT ON CORPORATE FINANCIAL PERFORMANCE, Human resource management, 33(4), 1994, pp. 509-530
Citations number
45
Categorie Soggetti
Psychology, Applied",Management
Journal title
Human resource management → ACNP
ISSN journal
00904848
Volume
33
Issue
4
Year of publication
1994
Pages
509 - 530
Database
ISI
SICI code
0090-4848(1994)33:4<509:AL-TEO>2.0.ZU;2-P
Abstract
Conventional wisdom holds that when a firm gets into trouble due to la gging sales and rising costs, cutting the size of the organization to reduce fat and waste is a normal and effective response. In this study , evidence was found to suggest that just the opposite might be true. The financial performance of Fortune 100 companies was tracked over a five-year period-two years prior to the announced layoff, the year of the layoff announcement, and two years following it. Contrary to expec tations, the results indicate that financial performance worsened, rat her than improved, following announced layoffs. Strategic and human re source implications for the management of corporate downsizing are pro vided. (C) 1994 by John Wiley & Sons, Inc.