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Nachrichten, Termine, Experten
Nachrichten, Termine, Experten
Especially in times of economic crisis, companies frequently lay off employees. In the short term, this can reduce costs - but what consequences does this measure have for a company's brand? A new study by researchers from KLU, Tilburg University and KU Leuven has investigated the phenomenon and provides clear recommendations on how communication measures should be planned.
The results of the study show: After layoffs are announced, brand strength drops by an average of 18 percent. It only recovers after about seven weeks. "This negative effect is strongly influenced by the corporate communications that take place in parallel," says Alexander Himme, Associate Professor of Management Accounting at KLU. Advertising and social media amplified the negative effect. "If, on the other hand, companies send out a lot of PR and CSR messages in parallel with the layoff, this average damage to the brand can be significantly contained," Himme explains. An above-average positive brand image also proved to be a helpful "buffer" against brand damage caused by the announcement of mass layoffs.
Consumers differentiate between advertising and PR
How do PR or CSR measures differ from marketing measures? The researchers' study shows that consumers rate marketing and social media activities as more entertaining, less trustworthy and, above all, cost-intensive. "This is then perceived very negatively in the case of layoff announcements," says Himme. PR or CSR measures, on the other hand, are considered trustworthy and informative - as long as they are not pure "greenwashing" and, for example, society benefits from the measures.
Tip: Involve marketing professionals early on
"This may sound surprising, but a company's marketing department should be involved in planning measures such as layoffs from the very beginning," Himme emphasizes. "After all, image losses have a direct negative financial impact via falling sales or a low willingness to pay." The damage to a company's brand can be limited by managing marketing, PR and CSR measures in parallel with the announcement of a mass layoff. "A long-term, coordinated communications strategy makes perfect sense here and protects the company from further image problems," says Himme.
About KLU
Kühne Logistics University – Wissenschaftliche Hochschule für Logistik und Unternehmensführung (KLU) – is a private university located in Hamburg’s HafenCity. The independent, state-certified university’s major research areas are Sustainability, Digital Transformation, Entrepreneurship and Value Creation in the fields of Transport, Global Logistics, and Supply Chain Management.
KLU is one of very few private universities in Germany entitled to confer their own PhDs.
With one BSc and three MSc degree programs, a structured doctoral program, and a part-time Executive MBA, KLU offers its 400 full-time students a high level of specialization and excellent learning conditions. KLU has an international team of around 30 professors who teach in English. In open, tailor-made management seminar series, industry specialists and managers alike benefit from the application of academic findings to practical issues.
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Samuel Stäbler, Alexander Himme, Alexander Edeling, Max Backhaus, How firm communication affects the impact of layoff announcements on brand strength over time, International Journal of Research in Marketing, Volume 40, Issue 3, 2023, Pages 700-723, ISSN 0167-8116, https://doi.org/10.1016/j.ijresmar.2023.06.002
KLU Prof. Alexander Himme
Christin Schwarzer
KLU/Christin Schwarzer
KLU building in Hamburg's HafenCity
Christin Schwarzer
KLU/Christin Schwarzer
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KLU Prof. Alexander Himme
Christin Schwarzer
KLU/Christin Schwarzer
KLU building in Hamburg's HafenCity
Christin Schwarzer
KLU/Christin Schwarzer
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