{
  "title": "Strategic Corporate Layoffs",
  "publication": "IMF Working Papers, December 28, 2016",
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  "summary": "Firms in the S&P 500 often announce layoffs within days of one another, despite the fact that the average S&P 500 constituent announces layoffs once every 5 years. By contrast, similarsized privately-held firms do not behave in this way.",
  "sections": [
    {
      "heading": "Summary and key findings",
      "content": "- Firms in the S&P 500 often announce layoffs within days of one another.\n- The average S&P 500 constituent announces layoffs once every 5 years.\n- Similar-sized privately-held firms do not behave in this clustered way.\n- Empirical evidence indicates clustering behavior is largely due to CEOs managing their reputation in financial markets.\n- Managers delay layoffs during good economic states to avoid damaging the market's perception of their ability.\n- The model predicts clustering in the timing of layoff announcements and shows a mechanism that amplifies the cyclicality of firms' layoff policies.\n- Reputation management is an important driver of layoff policies both at daily frequencies and over the business cycle, and can have significant macroeconomic consequences."
    },
    {
      "heading": "Theoretical framework and mechanisms",
      "content": "- Managers strategically time layoff announcements to influence market perceptions of ability.\n- Delay of layoffs during good states generates concentrated announcement timing (clustering).\n- The framework links individual managerial incentives to aggregate cyclical amplification of layoff policies."
    },
    {
      "heading": "Implications and macroeconomic consequences",
      "content": "- Clustering of layoff announcements can amplify business-cycle dynamics.\n- Reputation-driven timing decisions by CEOs can affect aggregate labor market outcomes and stock market reactions.\n- Strategic timing at daily frequencies accumulates into broader cyclical effects."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subject: Business cycles, Economic growth, Financial markets, Labor, Labor force, Stock markets, Wages\n- Keywords: business cycle, business cycles, clustering, firm level, Labor force, layoff, layoff announcement, layoff propensity, private firm, public firm, reputation management, Stock markets, Wages, WP\n\nIMF Working Papers — \"Strategic Corporate Layoffs\", Ruchir Agarwal and Julian Kolev, December 28, 2016.\n\n---\n\n Content in this bundle\n\n- Strategic Corporate Layoffs\n  - Strategic Corporate Layoffs (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Strategic Corporate Layoffs (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/strategic-corporate-layoffs-44504"
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    "Authors: Ruchir Agarwal, Julian Kolev",
    "Published: December 28, 2016",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475563924.001",
    "Firms in the S&P 500 often announce layoffs within days of one another.",
    "The average S&P 500 constituent announces layoffs once every 5 years.",
    "Similar-sized privately-held firms do not behave in this clustered way.",
    "Empirical evidence indicates clustering behavior is largely due to CEOs managing their reputation in financial markets.",
    "Managers delay layoffs during good economic states to avoid damaging the market's perception of their ability.",
    "The model predicts clustering in the timing of layoff announcements and shows a mechanism that amplifies the cyclicality of firms' layoff policies.",
    "Reputation management is an important driver of layoff policies both at daily frequencies and over the business cycle, and can have significant macroeconomic consequences.",
    "Managers strategically time layoff announcements to influence market perceptions of ability.",
    "Delay of layoffs during good states generates concentrated announcement timing (clustering).",
    "The framework links individual managerial incentives to aggregate cyclical amplification of layoff policies.",
    "Clustering of layoff announcements can amplify business-cycle dynamics.",
    "Reputation-driven timing decisions by CEOs can affect aggregate labor market outcomes and stock market reactions.",
    "Strategic timing at daily frequencies accumulates into broader cyclical effects.",
    "Subject: Business cycles, Economic growth, Financial markets, Labor, Labor force, Stock markets, Wages",
    "Keywords: business cycle, business cycles, clustering, firm level, Labor force, layoff, layoff announcement, layoff propensity, private firm, public firm, reputation management, Stock markets, Wages, WP",
    "**Strategic Corporate Layoffs**"
  ],
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