Manufacturing accounts for 19% of third-quarter mass layoffs

RP news wires
Tags: talent management, business management

Employers initiated 1,297 mass layoff events in the third quarter of 2010 that resulted in the separation of 187,091 workers from their jobs for at least 31 days, according to preliminary figures released November 12 by the U.S. Department of Labor’s Bureau of Labor Statistics. Over the year, both events and separations decreased sharply from program high third quarter levels (with data available back to 1995). Third quarter 2010 layoff data are preliminary and are subject to revision.

Manufacturing accounted for 19 percent of private non-farm extended layoff events and 18 percent of related separations in the quarter, the lowest third quarter proportions in program history. The average size of a layoff (as measured by separations per layoff event) was 144 during the quarter, the smallest average size in program history. Forty-seven percent of employers expected to recall at least some laid-off workers, up from 31 percent a year earlier.

The national unemployment rate averaged 9.5 percent, not seasonally adjusted, in the third quarter, essentially unchanged from 9.6 percent a year earlier. Private non-farm payroll employment, not seasonally adjusted, increased by 0.3 percent (337,000) over the year, the first over-the-year increase since the first quarter of 2008.

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

Manufacturing firms reported 249 events involving the separation of 34,221 workers. This sector accounted for 19 percent of private non-farm extended layoff events and 18 percent of related separations in the quarter, the lowest third quarter proportions in program history. A year earlier, manufacturing made up 29 percent of events and 28 percent of separations. The largest numbers of separations in the third quarter of 2010 were associated with food and transportation equipment manufacturing.

Construction firms recorded 202 events and 19,005 separations, primarily in specialty trade contracting and in heavy and civil engineering construction. Construction layoffs comprised 16 percent of events and 10 percent of separations. Both layoff events and separations in this sector decreased over the year.

Reasons for Extended Layoffs
Layoffs due to business demand factors accounted for 36 percent of events and 37 percent of related separations during the third quarter, down from 46 percent of events and 39 percent of separations in the same period a year earlier. Within this category, the largest over-the-year decrease in separations was due to slack work/insufficient demand.

Movement of Work
In the third quarter, 47 extended mass layoffs involved movement of work and were associated with 6,840 separated workers. Over the year, the number of such events decreased by 30, and the number of separations decreased by 6,014. Movement of work layoffs accounted for 5 percent of the non-seasonal layoff events during the third quarter.

Fifty-seven percent of the extended mass layoff events related to movement of work were from manufacturing industries. Employers cited organizational changes as an economic reason for layoff in 45 percent of the events involving movement of work. Among the regions, the largest proportions of workers affected by the movement of work were in the South and the West. By state, California, New Jersey, and Iowa reported the highest numbers of separations associated with movement of work.

The 47 extended layoff events with movement of work for the third quarter involved 71 identifiable relocations of work actions. Employers were able to provide more complete separation information for 38 of these actions. Of these 38 actions, 79 percent involved work moving within the same company, and 84 percent were domestic reassignments.

Recall Expectations
Forty-seven percent of employers reporting an extended mass layoff in the third quarter indicated they anticipated some type of recall, up from 31 percent a year earlier. Of those employers expecting to recall workers, 39 percent indicated that the offer would be extended to all displaced employees, and 68 percent of employers anticipated extending the offer to at least half of the workers. Sixty-six percent of employers expecting to recall laid-off employees intend to do so within six months. Excluding extended mass layoff events due to seasonal work and vacation period, in which 93 percent of the employers expected a recall, employers anticipated recalling laid-off workers in just 29 percent of the events.

Size of Extended Layoffs
The average size of a layoff (as measured by separations per layoff event) was 144 during the quarter, the smallest average size in program history. Events were primarily concentrated at the lower end of the extended layoff-size spectrum, with an all-time program high 75 percent involving fewer than 150 workers, up from 68 percent a year ago. Conversely, only 3 percent of events involved 500 or more workers, the lowest all-time proportion in program history.

Initial Claimant Characteristics
A total of 177,807 initial claimants for unemployment insurance were associated with extended mass layoffs in the third quarter of 2010. Of these claimants, 16 percent were black, 23 percent were Hispanic, 44 percent were women, and 21 percent were 55 years of age or older. The percentage of Hispanic claimants reached an all-time program high during the quarter. Among persons in the civilian labor force for the same period, 12 percent were black, 15 percent were Hispanic, 47 percent were women, and 20 percent were 55 years of age or older.

Geographic Distribution
Among the four census regions, the West and the Northeast recorded the highest numbers of separations due to extended mass layoff events in the third quarter. Among the nine census divisions, the highest numbers of separations were in the Pacific and the Middle Atlantic. All regions and divisions registered over-the-year decreases in the number of separations. California recorded the largest number of worker separations, followed by New York, Florida and Illinois. Over the year, 43 states reported decreased numbers of laid-off workers, led by California, Florida and Pennsylvania.

Eighty-seven percent of the initial claimants associated with extended mass layoff events in the third quarter resided within metropolitan areas, up from 84 percent a year earlier. Among the 372 metropolitan areas, New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa., reported the highest number of resident initial claimants. Miami-Fort Lauderdale-Pompano Beach, Fla., and Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md., moved into the top 10 metropolitan areas in terms of initial claims by residency of claimant in the third quarter, replacing Detroit-Warren-Livonia, Mich., and Las Vegas-Paradise, Nev., from the third quarter 2009.


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