repeat layoff acceleration short
What it checks
Companies that lay off twice within six months are in a cost-cutting spiral; the stock underperforms.
Mechanism
A single layoff is noisy; a 2nd layoff at the same company within 180d signals the first round didn't fix demand and management is in a cost-cutting spiral. Hallock 1998 and Farber-Hallock 2009 both document the asymmetric short-side response on repeat events.
Signal rule
2nd layoff within 180 calendar days of the prior layoff (same ticker_link) → SHORT on T+1; hold 20/40/60d.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
layoffs_fyi_eventsPublic layoffs.fyi layoff announcements with company-to-ticker resolution.
Expected edge
- Paper alpha
- 100-300 bps
- Paper window
- T+1 to T+60d
100-300 bps over 60d (modeled, sparse event family).
Example tickers where this is likely to fire
Illustrative only — the signal fires based on the live data, not a fixed list.
Related families
layoff wave shortLabor / corporate eventsLarge announced layoffs proxy demand stress, margin pressure, or post-hype cost cutting. The first-pass signal shorts unusually large layoff events after a T+1 lag.
tech layoff sector rotationMacroCross-firm clustering of large tech layoffs (>=3 distinct companies announcing >=250 cuts each within 14d) signals an industry-wide demand shock. Drives rotation OUT of growth-tech ETFs (QQQ, XLK, XLY, ARKK) INTO defensives (XLP, XLU, XLV).
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