Does slimming down boost spirits? Spinoffs and employee satisfaction

We investigate how corporate spinoffs influence employee satisfaction at the parent company. Using Glassdoor employee ratings from 2012 to 2024 and combining Coarsened Exact Matching with a difference-in-differences design, we find that spinoffs significantly increase employee satisfaction at the remaining parent firm. The effect extends to career opportunities, compensation and benefits, culture and values, and senior leadership ratings, and is stronger when pre-spinoff pay inequality is greater, particularly for lower-tier employees and more strongly among longer-tenure employees. We also find stronger effects in firms with greater line of business concentration. These findings suggest that corporate refocusing can improve workplace sentiment by alleviating pre-existing pay-related frictions and sharpening organizational focus.