The Anticipation of Plant Closing: Employee Reactions

Abstract

In the United States, the Worker Adjustment and Retaining Notification Act requires that companies give employees a 60-day notice in the event of layoffs or a plant closing. A manufacturing plant in the southeastern United States gave over 400 hourly employees a 6-month advance notice before the closing of the plant in which they worked; they also received considerable severance benefits. The present study examined the feelings and reactions of these employees shortly after the announcement of the plant closing. Survey results showed that the majority of these employees had been involved in job search activities during this 6-month advance notice period; some had already been offered jobs. Nevertheless, many had feelings of resignation and sadness. The results are discussed in light of the psychological costs of a plant closing and a corporation's sense of social responsibility.