Manufacturing sector accounts for 24% of April mass layoffs

Employers initiated 1,564 mass layoff events in the first quarter of 2010 that resulted in the separation of 221,150 workers from their jobs for at least 31 days, according to preliminary figures released May 12 by the U.S. Bureau of Labor Statistics. Both events and separations decreased by record amounts from the same period a year earlier, when layoffs and associated separated workers reached program highs (with data available back to 1995).

Seventeen of 18 major industry sectors in the private non-farm economy registered sharp declines over the year in the number of extended mass layoff events, with 12 industries registering record declines in the number of events. Forty-two percent of employers expected to recall at least some laid-off workers, up from 25 percent a year earlier. First-quarter 2010 layoff data are preliminary and are subject to revision.

The national unemployment rate averaged 10.4 percent, not seasonally adjusted, in the first quarter of 2010, up from 8.8 percent a year earlier. Private non-farm payroll employment, not seasonally adjusted, decreased by 2.8 percent (-3,032,000) over the year.

Industry Distribution of Extended Layoffs
Manufacturing firms reported 380 events involving the separation of 51,333 workers. Manufacturing accounted for 24 percent of private non-farm extended layoff events and 23 percent of related separations in the first quarter of 2010, the lowest proportions for any first quarter. A year earlier, manufacturing made up 40 percent of events and 39 percent of separations. The largest numbers of separations within the manufacturing sector were associated with food (largely from fruit and vegetable canning) and transportation equipment (largely from automobile manufacturing). All 21 manufacturing subsectors experienced over-the-year decreases in the number of layoff events.

Construction firms recorded 400 events and 42,040 separations, primarily in specialty trade contractors (largely from non-residential electrical contractors) and heavy and civil engineering construction (largely from highway, street and bridge construction). In the first quarter of 2010, layoffs in this sector comprised 26 percent of events and 19 percent of separations.

Seventeen of 18 major industry sectors in the private non-farm economy registered sharp declines over the year in the number of extended mass layoff events. Layoff events in 12 industries decreased by record levels – mining; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; finance and insurance; real estate and rental and leasing; professional and technical services; management of companies and enterprises; administrative and waste services; and other services, except public administration.

Reasons for Extended Layoffs
Among the seven categories of economic reasons for extended mass layoffs, business demand factors accounted for 41 percent of events and 38 percent of related separations during the first quarter of 2010, down from 54 percent of events and 48 percent of separations in the same period a year earlier. Separations related to business demand factors decreased over the year by 250,749, or 75 percent. Within the business demand category, the largest over-the-year decrease in separations was due to slack work/insufficient demand (-205,424).

Movement of Work
In the first quarter of 2010, 61 extended mass layoffs involved movement of work and were associated with 8,499 separated workers. The number of events decreased by 31 from the first quarter of 2009 and the number of separations decreased by 7,002 over the year. Movement of work layoffs accounted for 5 percent of both non-seasonal layoff events and separations during the first quarter of 2010.

Nearly six out of 10 extended mass layoff events related to movement of work were from manufacturing industries. In comparison, manufacturing accounted for more than two out of 10 events in the total private non-farm economy. Employers cited organizational changes in 44 percent of the extended mass layoff events involving the movement of work. The largest numbers of workers affected by the movement of work among the regions were in the South and Midwest. Among the states, California, New Jersey and Tennessee reported the highest numbers of separations associated with movement of work.

The 61 extended layoff events with movement of work for the first quarter of 2010 involved 82 identifiable relocations of work actions. Employers were able to provide more complete separations information for 58 of the actions. Of these, 86 percent involved work moving within the same company and 78 percent were domestic reassignments.

Recall Expectations
Forty-two percent of employers reporting an extended mass layoff in the first quarter of 2010 indicated they anticipated some type of recall, up from 25 percent a year earlier. Excluding extended mass layoff events due to seasonal work and vacation period, in which 88 percent of the employers expected a recall, employers anticipated recalling laid-off workers in just 27 percent of the events. Of those employers expecting to recall workers, 27 percent indicated that the offer would be extended to all displaced employees and 67 percent of employers anticipated extending the offer to at least half of the workers. Sixty-seven percent of employers expecting to recall laid-off employees intend to do so within 6 months.

Size of Extended Layoffs 
In the first quarter of 2010, the average size of a layoff (as measured by separations per layoff event) was 141, the smallest average size in program history. Events during the first quarter of 2010 were concentrated at the lower end of the extended layoff-size spectrum, with 75 percent involving fewer than 150 workers, up from 64 percent a year ago. The percentage distribution of extended mass layoff events involving 500 or more workers registered program lows for both events (3 percent) and separated workers (19 percent).

Initial Claimant Characteristics
A total of 214,204 initial claimants for unemployment insurance were associated with extended mass layoffs in the first quarter of 2010. Of these claimants, 13 percent were black, 17 percent were Hispanic, 35 percent were women and 19 percent were 55 years of age or older. Among persons in the civilian labor force for the same period, 12 percent were black, 15 percent were Hispanic, 47 percent were women and 19 percent were 55 years of age or older.

Geographic Distribution
Among the four census regions, the Midwest and the West recorded the highest numbers of separations due to extended mass layoff events in the first quarter of 2010. Among the nine census divisions, the highest numbers of separations were in the East North Central and Pacific. All regions and divisions registered record level over-the-year decreases in the number of separations with the exception of the West South Central division.

California recorded the largest number of worker separations, followed by Illinois, Ohio, New York and Pennsylvania. After excluding the impact of seasonal reasons, these five states still reported the highest numbers of separated workers. Over the year, 49 states reported decreased numbers of laid-off workers, led by California, Florida and Michigan. Of these 49 states, twenty registered record over-the-year decreases in the number of separations – Arkansas, California, Florida, Illinois, Kansas, Kentucky, Maryland, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Washington, West Virginia and Wisconsin.

Eighty percent of the initial claimants associated with extended mass layoff events in the first quarter of 2010 resided within metropolitan areas, nearly the same as a year earlier (79 percent). Among the 372 metropolitan areas, Los Angeles-Long Beach-Santa Ana, Calif., reported the highest number of resident initial claimants. Houston-Sugar Land-Baytown, Texas, Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. and Sacramento-Arden-Arcade-Roseville, Calif., moved into the top 10 metropolitan areas in terms of initial claims by residency of claimant in the first quarter of 2010, replacing Detroit-Warren-Livonia, Mich., Las Vegas-Paradise, Nev. and Miami-Fort Lauderdale-Pompano Beach, Fla., from the previous year.