Skip to main content


Marius Guenzel, The Wharton School

Clint Hamilton, UC Berkeley

Ulrike Malmendier, UC Berkeley, NBER, and CEPR


We study whether CEO social preferences influence firm decision-making with respect to employees, using a new dataset on layoff announcements by U.S. public firms. We first document sizable frictions in firms’ layoff decisions: after exogenous CEO changes, new CEOs make more, and shareholder value-increasing, layoffs. Consistent with a mechanism of social preferences arising through social interactions, CEOs become more reluctant to make layoffs over their tenure as they form more connections inside the firm. This effect is amplified for “difficult-to-implement” layoffs during recessions, near company headquarters, and during the holiday season. Finally, we document a personal cost of firing for CEOs in the form of accelerated long-run mortality.

Scroll to Top