Samuel Stäbler , Alexander Himme , Alexander Edeling , Max Backhaus
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How firm communication affects the impact of layoff announcements on brand strength over time
Firms usually undertake layoffs to improve financial performance. However, layoffs often have negative effects on various stakeholders, including consumers. In this paper, we examine the magnitude and duration of the potential negative effect of layoff announcements on brand strength. We also examine how a firm's communication accompanying a layoff can potentially counteract the observed negative effect of layoff announcements on brand strength. We compare how advertising communication intensity, social media communication (i.e., brand-initiated tweets), public relation (PR) communication, and communication of CSR initiatives moderate the main effect of layoff announcements on brand strength. Using an error correction model and drawing on 366 announcements of layoff events in Germany, this study identifies the magnitude and duration of the main effect. An examination of five years of weekly consumer brand perception data across multiple industries and domestic and foreign firms shows that advertising communication intensity and social media communication amplify the negative impact of layoff announcements on brand strength. Conversely, PR communication and communication of CSR initiatives help mitigate the negative effect. These findings provide guidance on the best way for firms to design firm communication in the context of layoff announcements.
期刊介绍:
The International Journal of Research in Marketing is an international, double-blind peer-reviewed journal for marketing academics and practitioners. Building on a great tradition of global marketing scholarship, IJRM aims to contribute substantially to the field of marketing research by providing a high-quality medium for the dissemination of new marketing knowledge and methods. Among IJRM targeted audience are marketing scholars, practitioners (e.g., marketing research and consulting professionals) and other interested groups and individuals.