Economy & PolicyCore researchexperimental liveNew
Tech Layoff Sector Rotation
Updated eventData needs: mediumlong onlyshort only
paper
2018
Source
Falato, A., Kim, D., Ladika, T. (2018). "Rank and file employees and the discipline of external finance." European Financial Review (extended); Hallock, K. F. (1998) ILR.
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In plain terms
When 3+ tech firms announce big layoffs in two weeks, growth-tech rotates out and defensives rotate in.
How it works
Cross-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).
No live results for this strategy yet. Charts appear once it has earned a top spot on at least one stock, either on its own or as part of a blend of several strategies.
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Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Layoffs fyi events
Public layoffs.fyi layoff announcements with company-to-ticker resolution.
Expected edge
- Reported return
- 50-200 bps
- Tested over
- T+1 to T+40d
50-200 bps over 20-40d on the rotation pair.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Explore Tech Layoff Sector Rotation on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.