This study is to examine the effect of layoff on shareholders' wealth. Firms make layoff decisions by reason of cost cutting, lower performance, demand decline, restructuring. Therefore, I think that stock market responds to layoff positively, since the firm's labor productivity and profitability is improved after execution of layoff, I find that layoff variables effect on abnormal return positively in regression analysis. This means that layoff sends positive signal to the stock market for the firm's future performance. Therefore, layoff has a good effect on shareholders' wealth.

• 이재범