Employees outside company headquarters face greater risk of layoffs
Local community in a firm's headquarters might not care much about layoffs in distant regions
Employees working outside a firm’s headquarters could be more vulnerable to layoffs, shows a recent research paper by Andrea Bassanini, an economist with the OECD, and others. Analysing the behaviour of firms in France, they contend that firms are often sensitive to social pressure in the local environment where their headquarters are located. The responsiveness of firms also depends on the “selfishness" of local communities which might not care much about job-losses in other areas. Selfishness is measured using the share of charitable spending in the GDP of city/region with the firm’s headquarters. The authors conclude that there remains scope for further research on the topic, especially focusing on the behaviour of multi-national firms to test whether they tend to dismiss personnel more frequently in countries which are not their main areas of operation.