Mass Layoffs and CEO Turnover

  1. SHERRILYN M. BILLGER1,
  2. KEVIN F. HALLOCK2

Article first published online: 10 JUN 2005

DOI: 10.1111/j.0019-8676.2005.00395.x

Issue

Industrial Relations: A Journal of Economy and Society

Industrial Relations: A Journal of Economy and Society

Volume 44, Issue 3, pages 463–489, July 2005

Additional Information

How to Cite

BILLGER, S. M. and HALLOCK, K. F. (2005), Mass Layoffs and CEO Turnover. Industrial Relations: A Journal of Economy and Society, 44: 463–489. doi: 10.1111/j.0019-8676.2005.00395.x

Author Information

  1. 1

    Department of Economics, Illinois State University, Campus Box 4200, Normal, IL 61790

  2. 2

    Departments of Economics and Finance, and Institute of Labor and Industrial Relations, University of Illinois at Urbana-Champaign and NBER

Publication History

  1. Issue published online: 10 JUN 2005
  2. Article first published online: 10 JUN 2005

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We investigate the relationship between layoff announcements and CEO turnover over a 31-year period. We find that layoffs significantly increase CEO turnover in the following year, and, in some time periods, CEO changes are strongly positively associated with layoff announcements two years earlier. We proceed to show how this relationship has changed over time, and offer several possible explanations. Finally, we find strong evidence that layoffs that are associated with negative stock price reactions are much more likely to lead to CEO turnover than those associated with positive stock price reactions, especially in the earlier years in our sample.

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