Factors Driving Companies to Take Layoffs and Their Performance

• Main Authors: Yu-Chin Cheng, 鄭榆瑾
• Other Authors: 徐俊明
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/9p2k4z

碩士 === 國立中興大學 === 財務金融系所 === 99 === This study investigates factors driving companies to take layoffs, during the 2001 Internet Bubble (from January 2001 to December 2002) and 2008 Financial tsunami (from September 2008 to March 2009). We examine the post-bubble and post- tsunami performance of these companies. The results show that companies with lower scale, lower excess return, higher debt ratio, greater beta, and lower CEO''s salary tend to cut down the employee to reduce costs during economic shocks. That is, companies with lower development and higher risk are likely to take layoffs to reduce salary expenses during market downturn. In the long run, companies conducting layoffs outperform their matching companies, indicating that, layoffs do improve companies’ performance after economic shocks. The reason can be due to the unemployeement of those employees during economy recession, and they are willing to return to their original workplace, which had a low mitigation effect on their companies. In addition, unlike companies that cut assets, layoff companies could recover their production once they obtain original human resources.