downsizing

Year of Publication
1999
Abstract

We report preliminary results of an analysis of the reaction of stock prices to
announcements of reductions in force (RIFs) using a large sample of such announcements
during the 1970-1997 period collected from the Wall Street Journal index. We find some
evidence that the stock market reaction to the announcement of RIFs has become less
negative over this period. While a complete understanding of the underlying causes of
this finding awaits further research, one possible interpretation is that, over the last three
decades, RIF s designed to improve efiiciency have become more common relative to RIFs
designed to cope with reductions in product demand.

Number
414
Date Published
01/1999
Publication Language
eng
Citation Key
7976
Hallock, K., & Farber, H. (1999). Changing Stock Market Response to Announcement of Job Loss: Evidence from 1970-1997. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01j6731377t (Original work published 01/1999AD)
Working Papers