Is There a Right Way to Lay Off Employees in Times of Crisis?: The Role of Organizational Justice in the Case of Airbnb

The COVID-19 pandemic has negatively affected the tourism and services sector. Using the example of Airbnb’s recent layoff of 25% of its workforce, we focused on the role of organizational justice in mitigating the negative psychological impacts of layoffs. Based on a unique survey of Airbnb employe...

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Bibliographic Details
Published in:Sustainability 2023-03, Vol.15 (5), p.4690
Main Authors: Lee, Sanghyun, Hong, Sounman, Lee, Bong Gyou
Format: Article
Language:English
Subjects:
Beliefs, opinions and attitudes
Chesky, Brian
Coronaviruses
COVID-19
Economic aspects
Employees
Epidemics
Hospitality industry
Human resource management
Hypotheses
Job satisfaction
Layoffs
Least squares method
Medical research
Organizational justice
Organizational research
Pandemics
Perceptions
Productivity
Social responsibility
South Korea
Tourism
Workforce
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Summary:The COVID-19 pandemic has negatively affected the tourism and services sector. Using the example of Airbnb’s recent layoff of 25% of its workforce, we focused on the role of organizational justice in mitigating the negative psychological impacts of layoffs. Based on a unique survey of Airbnb employees who survived the layoffs, as well as those who left, we employed an ordinary least squares regression to show that employees’ perceptions of organizational justice were positively related to their job satisfaction and trust in management, while being negatively related to their emotional exhaustion and cynicism. We discovered the crucial importance of interactional justice (i.e., interpersonal and informational justice). The respect, dignity, and politeness shown by management (i.e., interpersonal justice), as well as truthful and adequate communication about the procedure (i.e., informational justice) were pivotal to successfully conducting layoffs, especially during unprecedented economic uncertainty.
ISSN:2071-1050
2071-1050
DOI:10.3390/su15054690