Economic crises, such as the one induced by the COVID-19 pandemic, and resulting widespread corporate cost-cutting, drastically alter the nature of work. Job insecurity represents a critical intermediate between the economic ramifications of an economic crisis and work and stress outcomes, however, the underlying cognitive consequences of job insecurity and how to buffer those effects are not well understood. We examine how corporate cost-cutting announcements indirectly relate to employees’ attention through their relationship with employee job insecurity and investigate supervisor support as a potential buffer of these relationships. We used multi-source data to test our research model, combining data on cost-cutting announcements (budget cuts, layoffs, and furloughs) in news articles for 165 organizations with survey data from 421 full-time employees from these organizations between March 26, 2020 and April 8, 2020. Cost-cutting announcements are positively related to job insecurity, which is related to employee’s attention with supervisor support mitigating the effects of job insecurity on attention. Grounded in self-regulation theories, we contribute to and extend the theoretical understanding of the organizational context for job insecurity and cognitive outcomes. We discuss the implications for organizations to manage and prepare for future economic crises, specifically on organizational communication and supervisor interventions.


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Cite as

Van Egdom, D., Spitzmueller, C., Wen, X., Kazmi, M., Baranski, E., Flin, R. & Krishnamoorti, R. 2021, 'Job insecurity during an economic crisis: the psychological consequences of widespread corporate cost-cutting announcements.', Occupational Health Science. https://doi.org/10.1007/s41542-021-00102-8

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Last updated: 15 July 2023
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