Layoffs Impact
Author-Lekha Karnik
MMS-Roll No-0222025
Kohinoor Business School
Literature Review
How mass layoffs are related to lower job performance and OCB among surviving employees in Chile: an investigation of the essential role of psychological Contract
LOPEZ BOHLE, et al. (2017) This article established a link between mass layoffs, layoffs having a detrimental impact on employee performance, job uncertainty, and psychological contract. During a recession, most businesses lay off employees in order to conserve money and survive. The current study aims to elucidate the role of the psychological contract in employee responses to mass layoffs, as well as how the last mass layoff is related to perceptions of psychological contract breach, and how mass layoffs are related to employee performance and organisational citizenship. Job instability is increasing as a result of widespread layoffs. work uncertainty, implying that more recent layoffs will be related with higher Job insecurity, indicating that more recent layoffs will be associated with higher AS research has shown that mass layoffs may have an impact on employee performance may be a general decline in employee performance after downsizing mass layoffs lead to employee performance mediators and a moderating effect to the relationship between layoffs and employee. This article studies the increases understanding of the processes underpinning how the mass layoffs influence employee behaviour in the workplace.
Information Asymmetries, Managerial Ownership, and the Impact of Layoff Announcements on Shareholder Wealth.
FILBECK, GREG et al. (2001) This paper examines the impact of layoff announcements on share price returns in relation to the magnitude of the layoff on the total firm workforce, the level of inside ownership, and the firm size,’ while controlling for employee count, institutional ownership, and profitability. This study finds a statistically significant negative share price response to layoff announcements, with higher negative share price responses arising from layoffs constituting a larger percentage of a firm’s employees. Also, they find that business size strongly predicts the cross-sectional distribution of’ share price responses to layoff’ announcements using an information asymmetry paradigm. They found no evidence of or a link between insider ownership and share price reaction to layoff announcements. They examine the influence of layoff announcements on share price returns with regard to levels of inside ownership, scale of the layoff, and firm size, while adjusting for differences in profitability, staff count, and institutional ownership.
“Everybody needs everyone”: a case study of workplace learning after a downsize.
MILLER, et al. (2020). This research paper says that The purpose of this study is to investigate how employees’ emotions following downsizing affect the learning they participate in following the downsizing event Practical implications: Downsized organisations must address the emotions of employees who survive layoffs, as well as how layoffs affect their work behaviour, particularly their learning behaviour. Organisations must understand how to favourably impact layoff survivors’ emotions in order to influence the survivors’ desire to learn and implement organisational reforms. The purpose of this study is to investigate how employees’ emotions following downsizing affect the learning they participate in following the downsizing event. Design/methodology/approach: A qualitative case study was used as the methodological technique. Semi-structured interviews were conducted with nine employees who were considered layoff survivors in a downsized organisation. The authors employed an initial, targeted, and axial coding method to analyse the data. Findings: Three themes emerge from the findings: “resilience,” “loyalty,” and “moral support.” These themes demonstrate layoff survivors’ empathy and the influence of the layoff on their loyalty to the organisation, as well as the social learning that happened following downsizing. Practical implications: Downsized organisations must address the emotions of employees who survive layoffs, as well as how layoffs affect their work behaviour, particularly their learning behaviour. Organisations must understand how to favourably impact layoff survivors’ emotions in order to influence the survivors’ desire to learn and implement organisational changes. One of the few ways to handle employees’ emotions and ensure they will be inspired to change with the organisation is to provide avenues for survivors to network within the firm, as well as significant possibilities. Originality/value: There has been little research on how emotions caused by organisational downsizing affect employees’ learning. Although many downsizing research investigates layoff survivors’ experiences following a downsizing, it does not address emotional variables or learning experiences. This research aims to fill that void.
Restricting seniority as a factor in public school district layoffs: Analyzing the impact of state legislation on graduation rates.
DABBS, et al. (2020). The Great Recession, school districts were forced to lay off a large number of teachers. Many states enacted legislation to limit the use of seniority in teacher layoffs. Such legislation may result in a greater annual increase in high school graduation rates. The results reveal a 0.3 percentage point improvement in yearly gains. Following the Great Recession, employment in the local education sector in the United States declined by approximately 364,000. I investigate if state legislation prohibiting or restricting the use of seniority in layoff decisions affects public high school graduation rates. Over a ten-year period, everything else being equal, such legislation enhances the yearly growth of district graduation rates by roughly 0.3 percentage points on average. This is economically relevant because the national graduation rate increased by one percentage point on average each year from 2010-11 to 2015-16. When states prohibit or limit the use of seniority in determining layoff orders, districts must rely on other factors such as teacher quality. Teachers who remain after layoffs in states with this law may be more successful than when states utilise seniority to decide layoff order.
COVID‐19 crisis and SMEs responses: The role of digital transformation.
KLEIN,et al. (2021) In addition to causing significant harm to people’s health, the coronavirus has had a negative impact on the financial health of businesses globally. SMEs (small and medium-sized firms) are particularly vulnerable. Characteristics such as a lack of financial resources and specialised skills exacerbate their position. This epidemic has resulted in more digital transformation, changes in customer behaviour, and a managerial and technology knowledge gap in order to solve these issues. As a result, this article addresses the broad flaws, strengths, problems, and opportunities for SMEs to deal with this pandemic, as well as how knowledge management (KM) might assist. They created a conceptual model based on organisational resilience concepts to show how their initial responses were and how they may become more adaptable. First, they did a review of the literature to see how SMEs responded to this issue. Study discovered responses to financial repercussions in the form of large layoffs, temporary and permanent closures, digitization bootstrapping, and strategic collaborations. They present some critical questions in the discussion area to highlight how knowledge may strengthen the role of digital transformation. They consider how a KM strategy should begin with organisational resilience principles to help SMEs capitalise on digital transformation opportunities. As far as practical implications go, our findings highlight the relevance of digital transformation as a set of instruments for adapting during and after a pandemic, alongside resilience engineering and knowledge management concepts. Future scholars might utilise this study as a conceptual framework to develop their own response and adaption strategies.
A WAY FORWARD FOR ROMANIAN SMALL BUSINESSES AFTER THE PANDEMIC.
TODERICIU, RAMONA, et al. (2021) The SARS-COV-2 virus has had a massive impact on small and medium-sized enterprises, with most struggling to stay viable during the pandemic. Uncertainty is a significant aspect that can have a significant influence on small enterprises, which was notably visible during a pandemic. Certainly, 2020 will be a year of challenges for SMEs, a year in which managers’ decisions will have a considerable impact on the course of their organisation, and a year in which adapting to current client expectations is critical. As a result, managers must be aware of and analyse current market developments in order to address adaptation challenges head on. Companies’ activities have primarily evolved in the internet environment, especially Companies’ activities have mostly evolved in the internet environment in order to retain contact with clients and keep the business running by selling items and services given through online platforms. The current study aims to review and analyse the short-term effects of the Covid-19 pandemic in order to disseminate the economic effects caused during this period relating to the impact of staff layoffs, restrictions, or business reorientation, and effects that can generate economic recession, with temporary or even permanent damages, in certain situations. As a result, we can state that there are excellent reasons to anticipate, as many experts do, that the effects of the epidemic will be felt for a longer length of time, without expecting a fast economic recovery, yet one that is gradual and long-lasting.
Institutions and preferences in settings of causal complexity: foreign institutional investors and corporate restructuring practices in France.
JUNG, DONG et al. (2015) In this article, we show how the interaction between institutional arrangements and the presence of various types of business stakeholders with unique preferences provides key insights into the conditions under which corporate restructuring practises are implemented. Institutions shape the range of strategic alternatives available to actors and mediate the translation of business stakeholders’ desires into corporate policy. Nonetheless, strategic choice is still conceivable because business stakeholders are subgroups with diverse interests and motivations that impact how they operate within an institutional framework. They investigate how equity-based remuneration incentives and UK/US-based institutional investors are connected with the implementation of asset divestitures and staff layoffs in France. Research discover three significant findings. First, the presence of hedge funds and equity-based compensation has an impact on the they discover three significant findings. First, the presence of hedge funds and equity-based compensation influences the possibility of French corporations divesting assets. Second, the impact of hedge funds on employee layoffs is dependent on the firm’s ownership structure. Third, layoffs in France are motivated by poor performance, in contrast to the American experience, where staff layoffs are also utilised as a strategic device to deal with institutional investors when things are good.Research findings highlight the impact of institutional limits on employment protection (at the national level) and the moderating effects of ownership structure (at the firm level) on the strategic and employment practises of French firms.
Heterogeneous effects of Brazilian unemployment insurance reforms on layoffs.
CARVO, et al. (2020) This research is the first to examine the diverse impact of changes in UI eligibility requirements on layoff probabilities using administrative data from Brazil’s unemployment insurance (UI) programme. They use exogenous programme modifications implemented by executive and legislative actions in 2015 to assess these implications. Research shows how important it is to use UI administrative data that takes into consideration the number of prior UI benefit requests in order to analyse the varied effects of changes in eligibility rules and produce more exact estimates. They show that modifications in UI eligibility standards in 2015 reduced layoffs, and they find evidence that the adjustments also reduced collaboration between workers and employers for layoffs as it became more difficult to obtain UI subsidies. Modifications to the UI eligibility criteria requirements had varying effects based on the number of previous benefit petitions. Prior to workers’ second benefit request, layoffs were at their peak. The number of preceding Unemployment Insurance (UI) spells is required to estimate the effects. Changes in Ul eligibility requirements have varying effects on layoffs. The new UI regulations reduced layoffs prior to the second UI request more than the first. They estimate that collusion between workers and employers has a lower impact.
The impact of mass layoffs on the educational investments of working college students.
OST, BEN, et al. (2018) Analysing how working students deal with personal economic shocks is becoming increasingly essential since the proportion of college students working long hours has risen considerably in recent decades. They also investigate how layoff affects the educational results of working college students using administrative data on Ohio college students linked to matched firm-worker pay data. In theory, layoff reduces the opportunity cost of attending college, but it may also make financing one’s education more difficult, thus the net effect is uncertain. They find that while layoffs reduce the likelihood of employment while in school, they have no effect on enrolment decisions at a large margin. On the intense margin, the study find that layoff increases enrolment credits, which is consistent with the fact that the opportunity cost of education has fallen. In short the study examine how layoff affects the educational outcomes of working college students.
From being sacked to being unwell: A conservation of resources view on the effects of psychological contract violation on layoff victims’ wellbeing.
ASANTE, et al. (2023) find that literature agrees that layoff is a sort of psychological contract (PC) violation, research has yet to investigate how such a violation affects layoff victims’ wellbeing outcomes such as life satisfaction, sleep quality, and psychological distress. They hypothesised a dualstage moderated mediation model that integrates psychological contract theory and conservation of resources theory, in which PC violation caused by layoff is connected with three dimensions of layoff victims’ wellbeing via concern. This indirect effect is hypothesised to be dependent on the amount of social support received. We found evidence for the dualstage moderated mediation model in a sample of 252 layoff victims, in which the link between PC violation and the three dimensions of wellbeing via worry was found evidence for the dualstage moderated mediation model, in which the connection between PC violation and the three measures of wellbeing via anxiety was modest. The findings help us understand how PC violations are related to nonwork consequences.
Conclusion:
Job instability is increasing as a result of widespread layoffs. work uncertainty, implying that more recent layoffs will be related with higher Job insecurity, indicating that more recent layoffs will be associated with higher AS research has shown that mass layoffs may have an impact on employee performance may be a general decline in employee performance after downsizing mass layoffs lead to employee performance mediators and a moderating effect to the relationship between layoffs and employee. This study finds a statistically significant negative share price response to layoff announcements, with higher negative share price responses arising from layoffs constituting a larger percentage of a firm’s employees. The purpose of this study is to investigate how employees’ emotions following downsizing affect the learning they participate in following the downsizing event. Practical implications: Downsized organisations must address the emotions of employees who survive layoffs, as well as how layoffs affect their work behaviour, particularly their learning behaviour. Although many downsizing research investigates layoff survivors’ experiences following a downsizing, it does not address emotional variables or learning experiences. Many states enacted legislation to limit the use of seniority in teacher layoffs. I investigate if state legislation prohibiting or restricting the use of seniority in layoff decisions affects public high school graduation rates. They present some critical questions in the discussion area to highlight how knowledge may strengthen the role of digital transformation. They consider how a KM strategy should begin with organisational resilience principles to help SMEs capitalise on digital transformation opportunities. As far as practical implications go, our findings highlight the relevance of digital transformation as a set of instruments for adapting during and after a pandemic, alongside resilience engineering and knowledge management concepts. As a result, managers must be aware of and analyse current market developments in order to address adaptation challenges head on. The current study aims to review and analyse the short-term effects of the Covid-19 pandemic in order to disseminate the economic effects caused during this period relating to the impact of staff layoffs, restrictions, or business reorientation, and effects that can generate economic recession, with temporary or even permanent damages, in certain situations. First, the presence of hedge funds and equity-based compensation has an impact on the they discover three significant findings. Third, layoffs in France are motivated by poor performance, in contrast to the American experience, where staff layoffs are also utilised as a strategic device to deal with institutional investors when things are good. Research findings highlight the impact of institutional limits on employment protection (at the national level) and the moderating effects of ownership structure (at the firm level) on the strategic and employment practises of French firms. Modifications to the UI eligibility criteria requirements had varying effects based on the number of previous benefit petitions. Changes in Ul eligibility requirements have varying effects on layoffs. They also investigate how layoff affects the educational results of working college students using administrative data on Ohio college students linked to matched firm-worker pay data. In short, the study examine how layoff affects the educational outcomes of working college students. They hypothesised a dualstage moderated mediation model that integrates psychological contract theory and conservation of resources theory, in which PC violation caused by layoff is connected with three dimensions of layoff victims’ wellbeing via concern. As a result of widespread layoffs, job insecurity is increasing. Work uncertainty, implying that more recent layoffs will be associated with higher AS research has shown that mass layoffs may have an impact on employee performance may be a general decline in employee performance after downsizing mass layoffs lead to employee performance mediators and a moderating effect to the relationship between layoffs and employee. This study discovers a statistically significant negative share price response to layoff announcements, with stronger negative share price responses resulting from layoffs affecting a greater proportion of a firm’s employees. The goal of this study is to look into how employees’ emotions after being downsized effect the learning they do after the incident. Implications for practise: Employees who endure layoffs must be addressed emotionally, as well as how layoffs effect their job conduct, particularly their learning behaviour. Although many downsizing research looks on layoff survivors’ experiences after a downsizing, it does not look into emotional factors or learning experiences. Many states passed legislation restricting the use of seniority in teacher layoffs. I look into whether state legislation that prohibits or limits the use of seniority in layoff decisions affects public high school graduation rates. In the discussion section, they address some crucial questions to illustrate how knowledge may increase the role of digital transformation. They discuss how a knowledge management strategy should begin with organisational resilience principles in order to assist SMEs in capitalising on digital transformation prospects. In terms of practical consequences, our findings emphasise the need of digital transformation as a set of tools for responding during and after a pandemic, in addition to resilience engineering and knowledge management ideas. As a result, in order to handle adaptation difficulties head on, managers must be aware of and understand current market developments. The current study aims to review and analyse the short-term effects of the Covid-19 pandemic in order to disseminate the economic effects caused during this period, such as the impact of staff layoffs, restrictions, or business reorientation, as well as effects that can generate economic recession, with temporary or even permanent damages, in the United States. The current study aims to review and analyse the short-term effects of the Covid-19 pandemic in order to disseminate the economic effects caused during this period relating to the impact of staff layoffs, restrictions, or business reorientation, and effects that can generate economic recession in certain situations, with temporary or even permanent damages. First, the presence of hedge funds and equity-based compensation influences the discovery of three important discoveries. Third, in France, layoffs are motivated by bad performance, as opposed to the American experience, where staff layoffs are also used as a strategic tool to deal with institutional investors when things are going well. The findings of the research indicate the impact of institutional constraints on employment protection (at the national level) as well as the moderating effects. the moderating impact of ownership structure (at the firm level) on French enterprises’ strategic and employment practises. Changes to the UI eligibility standards had various implications depending on the number of previous benefit requests. Layoffs are affected differently by changes in Ul eligibility rules. They also look at how layoffs affect the educational outcomes of working college students, utilising administrative data on Ohio college students linked to firm-worker pay data. In summary, the study looks at how layoffs affect the educational results of working college students. They proposed a dual-stage moderated mediation model that combines psychological contract theory with conservation of resources theory, in which PC violation induced by layoff is linked to three dimensions of layoff victims’ well-being via worry.
Reference:
ASANTE, E. A. et al. (2023) From being sacked to being unwell: A conservation of resources view on the effects of psychological contract violation on layoff victims’ wellbeing. Human Resource Management Journal, [s. l.], v. 33, n. 2, p. 362–383, 2023. DOI 10.1111/1748-8583.12442. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=b1a8ee45-738e-3c6e-ba29-5c350558caa9. Acesso em: 12 maio. 2023.
CRAVO, et al. (2020) Heterogeneous effects of Brazilian unemployment insurance reforms on layoffs. Economics Letters, [s. l.], v. 197, p. N.PAG, 2020. DOI 10.1016/j.econlet.2020.109612. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=1aa61ca0-0fd0-3d8a-b004-89b64a50bcac. Acesso em: 12 maio. 2023.
DABBS, C.M et al. (2020) Restricting seniority as a factor in public school district layoffs: Analyzing the impact of state legislation on graduation rates. Economics of Education Review, [s. l.], v. 74, p. N.PAG, 2020. DOI 10.1016/j.econedurev.2019.101926. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=bcddc417-b2e7-3f06-9a1b-edbed620fb10. Acesso em: 12 maio. 2023.
FILBECK, G.; WEBB, S. E. (2001) Information Asymmetries, Managerial Ownership, and the Impact of Layoff Announcements on Shareholder Wealth. Quarterly Journal of Business & Economics, [s. l.], v. 40, n. 2, p. 31, 2001. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=2f01ae71-f28d-3e53-804e-7e09894d229a. Acesso em: 12 maio. 2023.
JUNG, D. K.; AGUILERA, R.; GOYER, M (2015) Institutions and preferences in settings of causal complexity: foreign institutional investors and corporate restructuring practices in France. International Journal of Human Resource Management, [s. l.], v. 26, n. 16, p. 2062–2086, 2015. DOI 10.1080/09585192.2014.971843. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=e0e9508c-2a28-3bdf-9be1-e335f4b1d79d. Acesso em: 12 maio. 2023.
KLEIN, V. B.; TODESCO, J. L. (2021) crisis and SMEs responses: The role of digital transformation. Knowledge & Process Management, [s. l.], v. 28, n. 2, p. 117–133, 2021. DOI 10.1002/kpm.1660. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=d5e48168-6536-3d86-b73e-0963fd3e8dd1. Acesso em: 12 maio. 2023.
LÓPEZ BOHLE, S. et al. (2017) How mass layoffs are related to lower job performance and OCB among surviving employees in Chile: an investigation of the essential role of psychological contract. International Journal of Human Resource Management, [s. l.], v. 28, n. 20, p. 2837–2860, 2017. DOI 10.1080/09585192.2016.1138988. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=1d9764c6-80fa-3b61-beb5-cd96100cdd38. Acesso em: 12 maio. 2023.
CRAVO, et al. (2020) Heterogeneous effects of Brazilian unemployment insurance reforms on layoffs. Economics Letters, [s. l.], v. 197, p. N.PAG, 2020. DOI 10.1016/j.econlet.2020.109612. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=1aa61ca0-0fd0-3d8a-b004-89b64a50bcac. Acesso em: 12 maio. 2023.
OST, B.; PAN, W.; WEBBER, D. 2018) The impact of mass layoffs on the educational investments of working college students. Labour Economics, [s. l.], v. 51, p. 1–12, 2018. DOI 10.1016/j.labeco.2017.11.008. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=aa573f0f-7e3d-3521-a3bf-e8ec9281c171. Acesso em: 12 maio. 2023.
TODERICIU, R.; BOANTA, A. (2021) A Way Forward for Romanian Small Businesses After the Pandemic. Revista Economica, [s. l.], v. 73, n. 1, p. 114–123, 2021. DOI 10.56043/reveco-2021-0010. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=bff82228-561d-3135-bb71-8be2eaebf807. Acesso em: 12 maio. 2023.