Workforce reduction and firm performance: evidence from french firm data (1994-2000)

Bénédicte Reynaud (1)

1 PSE - Paris-Jourdan Sciences Economiques

Using a large annual database of French firms (1994-2000), this article examines the determinants of workforce reductions in publicly listed and non-listed companies and their consequences on firm performance. First, workforce reduction appears to be a defensive response to adverse economic shocks. However, publicly listed firms anticipate better than do unlisted companies the decision to cut jobs. Second, a difference-in-differences model indicates that there has been a very small but significant improvement in the major performance indicators for the non-listed companies. For listed companies, the corresponding estimates are not significant.

Mots clés: Workforce reduction; Layoffs; Financial performance; Return on equity; Selection bias

Domaines: Economies et finances

Bénédicte Reynaud. Workforce reduction and firm performance: evidence from french firm data (1994-2000). Socio-Economic Review, 2012, ⟨10.1093/ser/mws017⟩. ⟨hal-00813146⟩