A new GLO Discussion Paper finds that the damage to the firms’ image triggered by the negative social media reactions following job destructions entail a financial cost for firms that adds to the standard adjustment costs of dismissals.
GLO Discussion Paper No. 1254, 2023
Don’t Downsize This! Social Reactions to Mass Dismissals on Twitter – Download PDF
by Bassanini, Andrea & Caroli, Eve & Chaves Ferreira, Bruno & Reberioux, Antoine
GLO Fellow Andrea Bassanini
Author Abstract: We study social reactions to job destructions on Twitter. We use information on large-scale restructuring events announced in the United Kingdom over the period 2013-2018. We match it with data collected on Twitter regarding the number and sentiments of the tweets posted around the time of the announcement and involving the company name. We show that jobdestruction announcements immediately elicit numerous and strongly negative reactions. These reactions are almost five times larger than the positive reactions to job-creation announcements. We also show that the negative reactions triggered by job-destruction announcements are associated with significant losses in the market value of the downsizing firms. This suggests that the damage to the firms’ image triggered by the negative social reactions following job destructions entail a financial cost for firms that adds to the standard adjustment costs of dismissals.
Vol. 36, Issue 2, April 2023: Journal of Population Economics (JOPE) 16 articles.
Papers will be presented at the online JOPE Spring Conference on April 27, 2023. Registration details in due course at the GLO website.
Vol. 36, Issue 1, January 2023: Journal of Population Economics (JOPE) 16 articles. https://link.springer.com/journal/148/volumes-and-issues/36-1
Watch the videos of article presentations on December 1, 2022 during the GLO Global Conference 2022.
JOPE has CiteScore 6.5 (2021, LINK) & Impact Factor 4.7 (2021, LINK)
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