To investigate the strategic implications of layoffs on stockholder wealth and financial performance.
Analyzed financial data and stockholder responses to layoff announcements.
Evaluated changes in stockholder wealth pre- and post-layoff announcements.
Layoff announcements negatively affected stockholder wealth immediately after the news broke.
Long-term analysis showed a gradual recovery in stockholder wealth over six months.
Abstract
Researchers have largely ignored the strategic implications of layoffs. With the passage of the Worker Adjustment and Retraining Notification Act, many managers are anguishing about the consequence...