Much prior research has examined the impact of layoffs on firm financial performance. Many of these studies have examined the impact of the layoff announcement on the stock prices of the firms that announce the layoff with event study methodology. Fewer studies, however, have examined the long term financial performance of firms that implement layoffs. That is the issue being investigated in this paper. The sample is made up of firms that announced layoffs in 1993 and 1994. Event study results showed that the stock prices of these firms overall fell at the time the layoff was announced, although the market actually responded positively to layoff announcements by some firms. We examine a number of different financial performance measures for these firms in the years following the layoffs and the results are mixed. Our research attempts to identify the variables that help explain why some firms perform better following layoffs while others perform worse.