October 10, 2008 (The Editor’s Desk is updated each business day.)

Reasons for extended mass layoff events in the New York area, 1996-2006

From 1996 through 2006, the New York area had 2,629 extended mass layoff events which resulted in 439,198 employees being separated from their jobs. Seasonal layoffs accounted for 39 percent of the extended layoff actions in the New York metropolitan area during this 11-year period.

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Internal company restructuring — a category that includes all events involving financial difficulty, bankruptcy, ownership change, and reorganization — was the reason given for 25 percent of the layoff events.

For the U.S. as a whole, seasonal factors accounted 30 percent of all layoff actions, while internal company restructuring accounted for 20 percent.

The other two leading justifications for job cutbacks involved slack work, indicating nonseasonal insufficient demand for the company’s products or services, and the completion of a contract. In the New York area, about 12 percent of layoff events resulted from each of these factors, while nationally, slack work accounted for a greater share (16 percent) of major cutbacks.

These statistics are from the Mass Layoff Statistics program. To learn more, see "Extended mass layoffs after 2001: a comparison of New York and the Nation," by Bruce J. Bergman, in the Monthly Labor Review, September 2008. Extended mass layoff events consist of 50 or more initial claims for unemployment insurance benefits from an establishment during a 5-week period, with at least 50 workers separated for more than 30 days.