Life after the layoff: getting a job worth keeping

The competitive environment of business today makes corporate layoffs an organizational reality, and losing one's job can be a highly stressful experience. We propose and test a model that places objective underemployment and subjective underemployment in a causal sequence between organizational actions and employees' restoration of equilibrium by obtaining jobs worth keeping. We longitudinally examine relationships between layoff fairness, workers' stress symptoms and appraisal, and subsequent employment outcomes among 149 laid‐off technical employees over the course of one year. Structural equation model results support seven of nine hypothesized paths, and demonstrate discriminant validity between and mediational properties of objective and subjective underemployment. Findings also reveal the important role that employees' perceptions and subjective assessments play in successfully returning to pre‐job loss equilibrium following displacement. Copyright © 2008 John Wiley & Sons, Ltd.