Manufacturing accounted for 16% of extended mass layoff events in Q2

RP news wires
Tags: business management, talent management

Employers initiated 1,851 mass layoff events in the second quarter of 2010 that resulted in the separation of 338,064 workers from their jobs for at least 31 days, according to preliminary figures released August 11 by the U.S. Bureau of Labor Statistics. Over the year, both events and separations decreased sharply from program high second quarter levels (with data available back to 1995).

Manufacturing accounted for 16 percent of private non-farm extended layoff events and 15 percent of related separations in the second quarter of 2010, the lowest proportions for any quarter in program history. Fifty-six percent of employers reporting an extended mass layoff during the quarter indicated they anticipated some type of recall, up from 37 percent a year earlier. Over the year, the percentage of initial claimants who are women increased from 42 percent to 51 percent during the quarter. Second quarter 2010 layoff data is preliminary and subject to revision.

The national unemployment rate averaged 9.5 percent, not seasonally adjusted, in the second quarter of 2010, up from 9.1 percent a year earlier. Private non-farm payroll employment, not seasonally adjusted, decreased by 2.3 million over the year.

Industry Distribution of Extended Layoffs
Sixteen of 18 major industry sectors in the private non-farm economy registered declines over the year in the number of extended mass layoff events. Nineteen of 21 manufacturing subsectors experienced over-the-year decreases in the number of layoff events.

Manufacturing firms reported 299 events involving the separation of 51,085 workers. This sector accounted for 16 percent of private non-farm extended layoff events and 15 percent of related separations in the second quarter of 2010, the lowest proportions for any quarter in program history. A year earlier, manufacturing made up 31 percent of events and 30 percent of separations. The largest numbers of separations were associated with food and transportation equipment manufacturing.

Construction firms recorded 276 events and 34,642 separations, primarily in specialty trade contracting and heavy and civil engineering construction. Layoffs in this sector comprised 15 percent of events and 10 percent of separations.

Reasons for Extended Layoffs
Layoffs due to the completion of seasonal work accounted for 41 percent of events and 48 percent of related separations during the second quarter of 2010, up from 22 percent of events and 25 percent of separations in the same period a year earlier. Separations related to business demand factors decreased over the year by 139,687, or 61 percent. The largest over-the-year decrease in separations related to business demand was due to slack work/insufficient demand (-114,079).

Movement of Work
In the second quarter of 2010, 53 extended mass layoffs involved movement of work and were associated with 10,206 separated workers. Over the year, the number of events decreased from 116 to 53, and the number of separations decreased from 21,365 to 10,206. Movement of work layoffs accounted for 5 percent of the non-seasonal layoff events during the quarter.

Nearly half of the extended mass layoff events related to movement of work were from manufacturing industries. Employers cited organizational changes as for the reason for the layoff in 45 percent of the events involving the movement of work. Among the regions, the largest numbers of workers affected by the movement of work were in the Midwest and South. Illinois, Iowa and Virginia reported the highest numbers of separations associated with movement of work.

The 53 extended layoff events with movement of work for the second quarter of 2010 involved 71 identifiable relocations of work actions. Employers were able to provide more complete separation information for 44 of the actions. Of these, 93 percent involved work moving within the same company, and 75 percent were domestic reassignments.

Recall Expectations
Fifty-six percent of employers reporting an extended mass layoff in the second quarter 2010 indicated they anticipated some type of recall, up from 37 percent a year earlier. Excluding extended mass layoff events due to seasonal work and vacation period, in which 96 percent of the employers expected a recall, employers anticipated recalling laid-off workers in 28 percent of the events. Of those employers expecting to recall workers, 44 percent indicated that the offer would be extended to all displaced employees, and 79 percent of employers anticipated extending the offer to at least half of the workers. Seventy-four percent of employers expecting to recall laid-off employees intend to do so within six months.

Size of Extended Layoffs
In second quarter 2010, the average size of a layoff (as measured by separations per layoff event) was 183, the smallest second-quarter average size in program history. Events were primarily concentrated at the lower end of the extended layoff-size spectrum, with 67 percent involving fewer than 150 workers, up from 64 percent a year ago; 7 percent of the events involved 500 or more workers, the highest proportion since second quarter 2006.

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 second 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 over-the-year decreases in the number of separations.

California recorded the largest number of worker separations, followed by Illinois, New Jersey, Pennsylvania and Ohio. Over the year, 42 states and the District of Columbia reported decreased numbers of laid-off workers, led by California, Florida and Ohio.

Eighty-three percent of the initial claimants associated with extended mass layoff events in the second quarter of 2010 resided within metropolitan areas, nearly the same as a year earlier (81 percent). Among the 372 metropolitan areas, Los Angeles-Long Beach-Santa Ana, Calif., reported the highest number of resident initial claimants. Sacramento-Arden-Arcade-Roseville, Calif., St. Louis, Mo.-Ill., and Pittsburgh, Pa., moved into the top 10 metropolitan areas in terms of initial claims by residency of claimant in the quarter, replacing Miami-Fort Lauderdale-Pompano Beach, Fla., Detroit-Warren-Livonia, Mich., and Las Vegas-Paradise, Nev., from the previous year.


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