Financial Consequences of Employment-Change Decisions in Major U.S. Corporations

Downsizing implementation and financial performance

“…However, regression results do not provide support for this hypothesis. The amount of downsizing showed a non-significant relationship with firm performance, which suggests that the amount of downsizing has no significant impact on performance (this is consistent with previous studies for other countries; e.g., Cascio et al, 1997;Morris et al, Vanderheiden et al, 1999).…”

“…The third research area has been on the relationship between downsizing and corporate performance. While some studies suggest that firms choose to downsize in order to cut costs, and/or to improve financial performance (Espahbodi et al, 2000;Kozlowski et al, 1993;Mone, 1994) -under the assumption that firm's profitability will be increased with fewer employees (Cascio et al, 1997;Mckinley et al, 2000)-another stream of research finds that the effect of personnel reduction on profitability is non-existent or even negative. Therefore, downsizing may be inefficient and companies that downsize may be unable to financially outperform companies that maintain their employees (Mentzer, 1996;Morris et al, 1999;Vanderheiden et al, 1999).…”

“…Different measures such as stock prices (Hallock, 1998;Worrel et al, 1991) and several financial accounting outcomes (Cascio et al, 1997;De Meuse et al, 1994) may be used to examine financial performance -e.g., profit margin (i.e., profits/sales), return on assets (profits/assets), return on equity (profits/stockholder equity), asset turnover (sales/assets) and market-to-book ratio (market value/stockholders' equity). In line with other works (Cascio, 1998;De Meuse et al, 2004;Yu et al, 2006), we exploit one accounting measure to determine financial performance: return on assets (ROA).…”

Unlocking the careers of business professionals following job loss: sensemaking and career exploration of older workers

“…Burke, 1998;Cascio, 2004;Cascio & Young, 2003;Clair & Dufresne, 2004;Sparrow & Cooper, 1998). It is notable, however, that much of the careers' literature focuses on the predominantly negative outcomes of job loss: generally, in terms of career development and individual experiences (Feldman & Leana, 2000;McKee-Ryan, Song, Wanberg, & Kinicki, 2005).…”

Has Job Security Vanished in Large Corporations?

“…7 Hallock (1998) finds small, negative effects of layoff announcements on share prices and no effect on CEO pay. Worrell et al (1991) find stock prices go down after layoff announcements; Cascio et al (1997) found no overall effect of downsizing on stock returns, but firms combining downsizing with asset restructuring received higher returns.…”