Corporate Layoff Announcements and Shareholder Value: Empirical Evidence from Finland

Tutkimuksen tavoitteena on tutkia lyhyen aikavälin markkinareaktiota suomalaisten pörssiyhtiöiden irtisanomisilmoituksiin. Lisäksi tutkitaan poikkileikkausmenetelmän avulla, vaikuttavatko erilaiset yrityskohtaiset tekijät siihen miten osakemarkkinat suhtautuvat irtisanomisiin. Kolmantena tutkimuksen kohteena ovat maakohtaiset irtisanomisiin liittyvät tekijät sekä kuinka ekstensiivistä on yritysten tiedottaminen irtisanomisista. Aineisto sisältää 83 julkisesti annettua irtisanomistiedotetta viiden vuodenaikaväliltä (kesäkuu 2000 - kesäkuu 2005). Osakemarkkinoiden keskimääräistä reaktiota sekä kehitettyjä alihypoteeseja tutkittiin hyödyntämällä tapahtumatutkimusmetodia. Empiiriset tulokset osoittavat, että sijoittajat näkevät irtisanomisetkeskimääräisesti negatiivisina uutisina yhtiöiden markkina-arvon kannalta. Irtisanomisilmoituksia edeltävä markkinareaktio on negatiivinen tukien aiempia tutkimustuloksia Yhdysvaltojen ja Iso-Britannian markkinoilta. Erona aikaisempiin tutkimuksiin on kuitenkin se, että negatiivinen markkinareaktio on täysin hinnoiteltu jo ilmoitusta edeltävänä aikana. Tukea löytyi myös kaikille yrityskohtaisillealihypoteeseille, jotka selittävät sijoittajien reaktiota irtisanomisilmoituksiin: koko pääoman tuotto, suhdannesykli, corporate governance sekä yrityksen ja johdon maine.

Employee layoff announcements and shareholder wealth: empirical evidence from Finland 2008-2013

This thesis investigates the short-term stock price reaction to layoff announcements in Finland. It also studies whether the characteristics of the firm or the layoff announcement have an impact on the stock market reaction. Standard event study methodology was utilized to examine the stock price reactions to layoffs and to test the created hypotheses. The event pool consisted of 102 publicly disclosed layoff announcements that were announced during the time period from June 2008 to December 2013. The empirical results show that the stock market reaction is strongly positive in the pre-event period of -10 to -1 with CAAR of 2,69%. The reaction is however slightly negative on the event date with AAR of -0,57%. Based on the results the conclusion is that either the managers are timing the markets or the layoffs are seen as efficiency improving acts and the market becomes aware of such actions pre-event. Additionally different characteristic hypotheses are tested to find out whether they would explain the reaction. The characteristics are: the reason stated by the management, business cycle, industry group, prior performance, leverage-ratio, the size of the company, the size of the layoff and the duration of the layoff.

Managing Layoff Survivors

‰Û÷Survivor syndrome' or negative consequences of a layoff on survivors is the key reason why layoffs fail. This Capstone Project draws on downsizing-related research and proposes a customizable plan to revitalize the surviving workforce after a downsizing initiative. The plan divides downsizing-related interventions into three phases: pre-downsizing, day of the announcement, and post-downsizing. Key elements of this plan include linking the plan to a revised vision, detailed planning of the process, open, two-way communication systems, employee involvement in all stages of the process, respectable treatment of departing employees, plans to support survivors, training frontline managers, and implementing a top talent retention strategy. The Capstone also addresses roles and responsibilities of leaders, HR professionals, and managers in the survivor management process.

Spells of job search and layoff-- and their outcomes.

Mode of access: Internet.

Drug abuse among workers in Brazilian regions

OBJECTIVE: Many business organizations in Brazil have adopted drug testing programs in the workplace since 1992. Rehabilitation, rather than layoff and disciplinary measures, has been offered as part of the Brazilian employee assistance programs. The purpose study is to profile drug abuse among company workers of different Brazilian geographical regions. METHODS: Urine samples of 12,700 workers from five geographical regions were tested for the most common illicit drugs of abuse in the country: marijuana, cocaine, and amphetamine. Enzyme multiplied immunoassay technique (EMIT) and gas chromatography coupled with mass spectrometry (GC/MS) were the techniques utilized for urine testing. The distribution of collected urine samples according to geographical regions was: 72.0% southeast, 13.8% northeast, 7.9% south, 5.7% central west and 0.6% north. RESULTS: Of all samples analyzed, 1.8% was found to be positive for drugs: 0.5% from the south region, 1.1% from northeast, 1.2% from central west, 1.3% from north, and 2.2% from southeast. Of these, 59.9% was marijuana, 17.7% cocaine, 14.6% amphetamine, and 7.7% associated drugs. CONCLUSIONS: The distribution of drugs found in the samples shows a regional variation. Marijuana, however, was found in all regions. Cocaine was seen only in central west and southeast regions. Amphetamine was found in northeast, central west, and southeast regions.

Dizer sem falar: a Comissão de Ética, Sociedade e Cultura e a alegada tentativa de controlo da comunicação social por José Sócrates

Dissertação apresentada à Escola Superior de Comunicação Social como parte dos requisitos para obtenção de grau de mestre em Jornalismo.

Unemployment Risk and Wage Differentials

Workers in less secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical and firms differ only in job security (i.e. the probability that the worker is not sent into unemployment). In a setting where workers search for new positions both on and off the job, the worker's marginal willingness to pay for job security is endogenous: it depends on the behavior of all firms in the labor market and increases with the rent the employing firm leaves to the worker. We solve for the labor market equilibrium, finding that wages increase with job security for at least all firms in the risky tail of the distribution of firm-level unemployment risk. Meanwhile, unemployment becomes persistent for low-wage and unemployed workers, a seeming pattern of 'unemployment scarring' created entirely by firm heterogeneity. Higher in the wage distribution, workers can take wage cuts to move to more stable employment.

Unemployment Risk and Wage Differentials

Workers in less-secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical and firms differ only in job security (i.e. the probability that the worker is not sent into unemployment). In a setting where workers search for new positions both on and off the job, the worker’s marginal willingness to pay for job security is endogenous, increasing with the rent received by a worker in his job, and depending on the behavior of all firms in the labor market. We solve for the labor market equilibrium and find that wages increase with job security for at least all firms in the risky tail of the distribution of firm-level unemployment risk. Unemployment becomes persistent for low-wage and unemployed workers, a seeming pattern of ‘unemployment scarring’ created entirely by firm heterogeneity. Higher in the wage distribution, workers can take wage cuts to move to more stable employment.

Economic Impact of Closures on Displaced Workers, May 2002

Iowa Workforce Development research conducted in 2001 on Iowa workers displaced by layoffs indicated that post-layoff wages remained at or above pre-layoff levels. During the layoff quarters selected for analysis – first, second, and third quarters of 1998 – there were twenty-one layoff events, none of which were closures. The research at that time did not discriminate between closures or permanent layoffs for which no recall was expected and those layoff events expected to recall workers. The post/pre ratios1 of the affected workers in manufacturing were at or above 100%, while remaining slightly below the universe pre/post ratios for the same time period.

Downsizing, Job Insecurity, and Firm Reputation

This paper studies how firms make layoff decisions in the presence of adverse shocks. In this uncertain environment, workers' expectations about their job security affect their on-the-job performance. This productivity effect on job insecurity forces firms to strike a balance between laying off redundant workers and maintaining survivors' commitment when deciding on the amount and timing of downsizing. This framework offers an explanation of conservative employment practices (such as zero or reduced layoffs) based on firms having private information about their future profits. High retention rates and wages can signal that the firm has a bright future, boosting workers' confidence. Moreover, the model provides clear predictions about when waves of downsizing will occur as opposed to one-time massive cuts.

Downsizing, job insecurity and firm reputation

This paper studies how firms make layoff decisions in the presence of adverse shocks. In this uncertain environment, workers' expectations about their job security affect their on-the-job performance. This productivity effect on job insecurity forces firms to strike a balance between laying off redundant workers and maintaining survivors' commitment when deciding on the amount and timing of downsizing. This framework offers an explanation of conservative employment practices (such as zero or reduced layoffs) based on firms having private information about their future profits. High retention rates and wages can signal that the firm has a bright future, boosting workers' confidence. Moreover, the model provides clear predictions about when waves of downsizing will occur as opposed to one-time massive cuts.

Job dynamics, correlated shocks and wage profiles

We generalize the Mortensen-Pissarides (1994) model of the labor marketwith a more realistic structure for the stochastic process of theshocks to the worker-firm match. In this way we can acommodate theempirical observation that hazard rates of job termination decrease andaverage wages increase with job tenure. Besides being able to fit bettersome observables of the model, the changes we introduce are nontrivialfor the analysis of policies as well.

Joukkoirtisanomisen jälkeen - työllistymisen haasteet ja tukitoimien toimivuus irtisanottujen näkökulmasta

Tämän tutkimuksen tavoitteena on kuvata joukkoirtisanottujen näkökulmasta työllistymisen haasteita, tukitoimien toimivuutta ja miten tukitoimia kehittämällä pystyttäisiin vastaamaan paremmin irtisanottujen kokemiin haasteisiin. Tutkimusmenetelmä on laadullinen haastattelututkimus. Tutkimuksen aineisto kerättiin haastattelemalla yhtätoista Voikkaan tehtaalta vuonna 2006 irtisanottua työntekijää. Tutkimuksen perusteella keskeisimpinä työllistymisen haasteina nähdään ikä, yksipuolinen työkokemus, vaikeasti toiselle alalle siirrettävä ammattitaito sekä haluttomuus muuttaa toiselle paikkakunnalle. Pääsääntöisesti tukitoimiin oltiin melko tyytyväisiä, joskin mielipiteet tukitoimien onnistumisesta vaihtelivat paljon. Muutosturvan tärkeimpänä hyötynä nähtiin mahdollisuus opiskella taloudellisen tuen turvin. Tukitoimia koskevaa tiedotusta kritisoitiin mm. puutteellisista ja vääristä tiedoista.