Female top managers and layoffs: examining the contingency effects of the COVID-19 pandemic and country-level institutions

Purpose Previous research suggests that female leaders, who generally demonstrate higher levels of empathy toward employees than their male counterparts, are more likely to steer their firms away from layoffs. However, female leaders may also struggle with more significant resource constraints, potentially increasing the likelihood of layoffs in their firms. To reconcile these conflicting predictions, we develop a contingency model that considers the impact of the COVID-19 pandemic and country-level institutions on how top manager gender affects layoffs. Design/methodology/approach We use a combined dataset of the World Bank’s Enterprise Survey and the COVID-19 Pandemic Survey, which generates 1,283 firm observations across ten countries. Findings We found that, before the pandemic, the gender of top managers did not significantly affect layoffs in their firms, but during the pandemic, female-led firms experienced significantly higher layoff rates. Further, during the pandemic, the quality of country-level formal institutions attenuated the positive relationship between female top managers and layoffs, but country-level empathy (as an informal institution) did not have a significant effect on this relationship. Originality/value Overall, this pattern of findings highlights the importance of a contingency approach to understanding the roles of women in leadership.