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IZA Discussion Paper No. 13840
November 2020
Don't Downsize This! Social Reactions to Mass Dismissals on Twitter

We study the reactions to job destructions on Twitter. We use information on large-scale job-destruction and job-creation 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 job-destruction announcements immediately elicit numerous and strongly negative reactions. On the day of the announcement, the number of tweets and first-level replies sharply increases as does the negativity of the sentiments of the posted tweets. These reactions are systematically more important than reactions to job creations. We also show that they trigger significant losses in the market value of the downsizing firms. Our findings suggest that job destructions generate reputational costs for firms to the extent that they induce a strong negative buzz involving the company name.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Netzwerkkoordination
Christina Gathmann
christina.gathmann@liser.lu

Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

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