Mass Layoffs Summary
Technical information: (202) 691-6392 USDL 08-1146 http://www.bls.gov/mls/ For release: 10:00 A.M. (EDT) Media contact: (202) 691-5902 Friday, August 15, 2008 EXTENDED MASS LAYOFFS IN THE SECOND QUARTER OF 2008 In the second quarter of 2008, employers initiated 1,534 mass layoff events that resulted in the separation of 299,886 workers from their jobs for at least 31 days, according to preliminary figures released by the U.S. Department of Labor's Bureau of Labor Statistics. Both layoff events and separations reached their highest levels for the second quarter since 2003. The total number of layoff events was 113 higher in the second quarter of 2008 than the same period a year earlier, and the number of associated separations increased by 21,167. (See table A.) Second quarter 2008 layoff data are preliminary and are subject to revision. (See the Technical Note.) Mass layoff activity in professional and technical services and in finance and insurance reached second quarter program highs in 2008. Layoffs in professional and technical services were due largely to seasonal job cuts in tax preparation services. Finance and insurance layoffs continued to be concentrated in credit intermediation and related activities, largely in the real estate credit industry. Among the 7 categories of economic reasons for layoff, seasonal reasons accounted for the highest share of events (38 percent) and number of separations (141,562) in April-June 2008. (See table B.) These seasonal layoffs were due, in part, to the end of the school year. The largest over-the-year increases in the number of separations occurred in layoff events attributed to business demand factors (+18,868) and organizational changes (+18,356). Within these 2 categories, layoffs because of slack work more than doubled over the year to 40,300 separa- tions, and changes in business ownership more than quadrupled to 16,852. Permanent closure of worksites occurred in 10 percent of all extended mass layoff events and affected 33,695 workers during the second quarter of 2008. Fifty-three percent of employers reporting a layoff indicated they anticipate some type of recall, down from 57 percent a year earlier and the lowest second quarter proportion since 2003. The national unemployment rate averaged 5.2 percent, not seasonally adjusted, in the second quarter of 2008, up from 4.4 percent a year earlier. Private nonfarm payroll employment, not seasonally adjusted, decreased by 0.1 percent (-124,000) over the year. - 2 - Table A. Selected measures of extended mass layoff activity ----------------------------------------------------------------------- | | | Period | Layoff events | Separations | Initial claimants | | | ----------------------------------------------------------------------- | | | 2004 | | | | | | January-March ........| 1,339 | 276,503 | 238,392 April-June ...........| 1,358 | 278,831 | 254,063 July-September .......| 886 | 164,608 | 148,575 October-December .....| 1,427 | 273,967 | 262,049 | | | 2005 | | | | | | January-March ........| 1,142 | 186,506 | 185,486 April-June ...........| 1,203 | 246,099 | 212,673 July-September........| 1,136 | 201,878 | 190,186 October-December .....| 1,400 | 250,178 | 246,188 | | | 2006 | | | | | | January-March ........| 963 | 183,089 | 193,510 April-June ... .......| 1,353 | 295,964 | 264,927 July-September .......| 929 | 160,254 | 161,764 October-December (r)..| 1,640 | 296,662 | 330,954 | | | 2007 | | | | | | January-March ........| 1,110 | 225,600 | 199,250 April-June (r) .......| 1,421 | 278,719 | 259,234 July-September (r)....| 1,018 | 160,024 | 173,077 October-December (r) .| 1,814 | 301,592 | 347,146 | | | 2008 | | | | | | January-March (r) ....| 1,340 | 229,870 | 256,697 April-June (p) .......| 1,534 | 299,886 | 215,808 | | | ----------------------------------------------------------------------- r = revised. p = preliminary. Industry Distribution of Extended Layoffs Manufacturing industries accounted for 22 percent of private nonfarm extended layoff events and 19 percent of related separations in the second quarter of 2008; a year earlier, manufacturing made up 20 percent of events and 17 percent of separations. (See table 1.) Manufacturing had 334 extended layoff events in the second quarter of 2008, the highest second quarter total since 2003, and 56,212 separations. The largest numbers of separations were in transporta- tion equipment manufacturing (16,073, mostly associated with heavy duty truck manufacturing) and food manufacturing (10,569). Professional and technical services accounted for 5 percent of events and 12 percent of separations in the second quarter of 2008, the highest proportion of separations recorded in the program. These job cuts were due largely to seasonal layoffs in the tax preparation industry. Layoffs in transportation and warehousing accounted for 10 percent of all events and 12 percent of separations and were concen- trated in school and employee bus transportation. - 3 - Table B. Distribution of extended layoff events and separations by economic reason categories, April-June 2008p ---------------------------------------------------------------- | Layoff events | Separations Category |--------------------------------------- | Number | Percent | Number | Percent ------------------------|--------------------------------------- | | | | Total ................| 1,534 | 100.0 | 299,886 | 100.0 | | | | Business demand.........| 528 | 34.4 | 70,967 | 23.7 Organizational changes .| 107 | 7.0 | 33,828 | 11.3 Financial issues .......| 104 | 6.8 | 24,853 | 8.3 Production specific ....| (1) | (1) | (1) | (1) Disaster/safety ........| (1) | (1) | (1) | (1) Seasonal ...............| 582 | 37.9 | 141,562 | 47.2 Other/miscellaneous ....| 195 | 12.7 | 26,211 | 8.7 | | | | ---------------------------------------------------------------- 1 Data do not meet BLS or state agency disclosure standards. p = preliminary. Reasons for Extended Layoffs Among the seven categories of economic reasons for extended mass layoffs, events related to seasonal factors (seasonal and vacation period) accounted for 38 percent of the extended layoffs and 47 per- cent of separations during the second quarter of 2008. (See table 2.) The numbers of workers terminated because of seasonal reasons were highest in tax preparation, school and employee bus transportation, skiing facilities, food service contractors, and child daycare serv- ices. Job losses related to business demand (contract cancellation, contract completion, domestic competition, excess inventory, import competition, and slack work) accounted for 34 percent of the extended layoff events and resulted in 70,967 separations. Separations asso- ciated with business demand reasons registered the largest over- the-year increase (+18,868), as those related to slack work/insuffi- cient demand/nonseasonal business slowdown more than doubled. Organizational changes (business-ownership change and reorganiza- tion or restructuring of company) accounted for 7 percent of events and resulted in 33,828 separations during the second quarter of 2008, more than double the number of separations due to organizational change for the second quarter of 2007. This increase was due largely to busi- ness-ownership changes in the real estate credit industry. - 4 - Table C. Extended mass layoff events and separations, selected measures, second quarter 2008p ----------------------------------------------------------------------- | | Action | Layoff events | Separations | | -----------------------------------|-----------------|----------------- | | Total, private nonfarm ............| 1,534 | 299,886 | | Total, excluding seasonal | | and vacation events (1) ......| 952 | 158,324 | | Total events with movement | | of work (2) ................| 60 | 10,957 | | Movement of work actions ...| 84 | (3) With separations reported.| 62 | 6,516 With separations unknown .| 22 | (3) | | ----------------------------------------------------------------------- 1 The questions on movement of work were not asked of employers when the reason for layoff was either seasonal work or vacation period. 2 A layoff event can involve more than one movement of work action. 3 Data are not available. p = preliminary. Movement of Work In the second quarter of 2008, 60 extended mass layoffs involved the movement of work and were associated with 10,957 separated work- ers. (See table C.) These movements of work were to other domestic locations or to locations outside of the U.S., and they occurred either within the same company or to other companies. Movement of work layoffs accounted for 6 percent of nonseasonal layoff events in the second quarter of 2008. A year earlier, there were 65 layoff events and 11,352 separations associated with the movement of work. (See table 10.) Among the 60 extended mass layoff events with reported relocation of work in the second quarter of 2008, 63 percent were permanent closures of worksites, which affected 6,864 workers. In comparison, 10 percent of the total extended mass layoff events reported for the quarter involved the permanent closure of worksites affecting 33,695 workers. Of the layoffs involving the movement of work, 67 percent of the events and 60 percent of the laid-off workers were from manufacturing industries during the second quarter. (See table 7.) Among all pri- vate nonfarm extended layoffs, manufacturing accounted for 22 percent of the events and 19 percent of separations. While only 7 percent of the extended mass layoff events in the total private nonfarm economy were because of organizational change, such reasons accounted for 53 percent of layoff events associated with work relocation and resulted in 4,798 separations during the second quarter. (See table 8.) - 5 - Table D. Movement of work actions by type of separation where the number of separations is known by employers, second quarter 2008p -------------------------------------------------------------------- | | Activities | Actions (1) | Separations | | -------------------------------------------------------------------- | | With separations reported ......| 62 | 6,516 | | By location | | | | Out-of-country relocations ..| 19 | 2,761 Within company ............| 17 | 2,537 Different company .........| 2 | 224 | | Domestic relocations ........| 42 | 3,480 Within company ............| 40 | 3,338 Different company .........| 2 | 142 | | Unable to assign place of | | relocation ................ | 1 | 275 | | By company | | | | Within company ..............| 57 | 5,875 Domestic ..................| 40 | 3,338 Out of country ............| 17 | 2,537 | | Different company ...........| 5 | 641 Domestic ..................| 2 | 142 Out of country ............| 2 | 224 Unable to assign ..........| 1 | 275 -------------------------------------------------------------------- 1 Only actions for which separations associated with the movement of work were reported are shown. p = preliminary. Among the regions, the South (30 percent) and the West (29 percent) accounted for the largest proportions of workers affected by extended mass layoffs associated with the movement of work, followed by the Midwest (26 percent) and the Northeast (14 percent). (See table 9.) Some extended mass layoff events involve more than one relocation of work action. For example, an extended mass layoff event at an employer may involve job loss due to movement of work to both another domestic location of the company and a location out of the country. This would be counted as two movement of work actions. The 60 ex- tended layoff events with movement of work for the second quarter of 2008 involved 84 identifiable relocations of work. (See table C.) An identifiable relocation of work occurs when the employer provides sufficient information on the new location of work and/or the number of workers affected by the movement. Of the 84 relocations, employers were able to provide information on the specific number of separations associated with the movement of work component of the layoff in 62 actions involving 6,516 workers. (See table 10.) - 6 - Table E. Summary of employer expectations of a recall from extended layoff, second quarter 2007-second quarter 2008 ------------------------------------------------------------------------ | | Percentage of events Nature of the recall |_________________________________________ | | | | | | II | III | IV | I | II | 2007 | 2007 | 2007 | 2008(r)| 2008(p) ------------------------------------------------------------------------ | | | | | Anticipate a recall .......| 57.1 | 37.9 | 55.8 | 40.1 | 52.6 | | | | | Timeframe | | | | | | | | | | Within 6 months ...........| 87.5 | 83.9 | 87.9 | 69.8 | 83.6 Within 3 months .........| 59.7 | 62.7 | 34.2 | 45.4 | 56.9 | | | | | Size | | | | | | | | | | At least half .............| 93.3 | 86.0 | 90.5 | 73.2 | 87.7 All workers .............| 57.2 | 45.6 | 50.5 | 28.5 | 50.8 | | | | | ------------------------------------------------------------------------ r = revised. p = preliminary. In the 62 actions where employers were able to provide more com- plete separations information, 92 percent of relocations (57 out of 62) occurred within the same company. (See table D.) Sixty-eight percent of relocations (42 out of 62) were identified as domestic reassignments, while 31 percent (19 out of 62) involved out-of-country moves. Domestic relocation of work--both within the company and to other companies--affected 3,480 workers. Out-of-country relocations were associated with the separation of 2,761 workers, 2 percent of all nonseasonal and nonvacation extended mass layoff separations. (See table 11.) Recall Expectations Fifty-three percent of employers reporting an extended layoff in the second quarter of 2008 indicated they anticipated some type of recall, down from 57 percent a year earlier and the lowest second quarter proportion since 2003. (See table E.) Of those employers expecting to recall workers, 51 percent indicated that the offer would be extended to all displaced employees, the lowest second quarter proportion since 2003, and 88 percent of employers antici- pated extending the offer to at least half of the workers. Eighty- four percent of employers expecting to recall laid-off employees intend to do so within 6 months. - 7 - Table F. Distribution of extended layoff events by size of layoff, second quarter 2008p ------------------------------------------------------------------- | | | Layoff events | Separations Size |--------------------------------------- | | | | | Number | Percent | Number | Percent ------------------------------------------------------------------- | | | | Total ..................| 1,534 | 100.0 | 299,886 | 100.0 | | | | 50-99 .....................| 716 | 46.7 | 49,735 | 16.6 100-149 ...................| 319 | 20.8 | 37,286 | 12.4 150-199 ...................| 150 | 9.8 | 25,197 | 8.4 200-299 ...................| 163 | 10.6 | 37,946 | 12.7 300-499 ...................| 94 | 6.1 | 34,664 | 11.6 500-999 ...................| 64 | 4.2 | 43,413 | 14.5 1,000 or more .............| 28 | 1.8 | 71,645 | 23.9 ------------------------------------------------------------------- p = preliminary. Excluding layoff events due to seasonal work and vacation period (in which 97 percent of the employers expected a recall), employers anticipated recalling laid-off workers in 25 percent of the events, about the same as a year earlier (24 percent). Size of Extended Layoffs The average size of a layoff (as measured by separations per lay- off event) in the second quarter of 2008 was 195, compared to 196 per layoff in second quarter 2007. Layoff events continued to be concen- trated at the lower end of the extended layoff-size spectrum, with 47 percent of events involving between 50 and 99 workers and 67 percent of events with less than 150 workers. Layoffs involving less than 150 workers accounted for 29 percent of all separations during the period, the same percentage recorded a year earlier. Separations involving 500 or more workers, while comprising only 6 percent of the events, accounted for 38 percent of all separa- tions in the second quarter of 2008, up from 36 percent a year earlier. (See table F.) Initial Claimant Characteristics A total of 215,808 initial claimants for unemployment insurance were associated with extended mass layoffs in the second quarter of 2008. Of these claimants, 16 percent were black, 17 percent were Hispanic, 52 percent were women, 33 percent were 30 to 44 years of age, and 23 percent were 55 years of age or older. (See table 3.) Among persons in the civilian labor force for the same period, 12 percent were black, 14 percent were Hispanic, 46 percent were women, 33 percent were 30 to 44 years of age, and 18 percent were 55 years of age or older. - 8 - Table G. Mass layoff events and separations, selected metropolitan areas -------------------------------------------------------------------------------- | | | Events | Separations Metropolitan area |-----------------|----------------- | | | | | II | II | II | II | 2007(r)| 2008(p)| 2007(r)| 2008(p) -------------------------------------------------------------------------------- | | | | Total, nonmetropolitan areas ...............| 195 | 179 | 32,057 | 29,857 | | | | Total, 369 metropolitan areas ..............| 718 | 715 |107,310 |109,698 | | | | Chicago-Naperville-Joliet, Ill.-Ind.-Wis. .| 31 | 41 | 6,199 | 8,603 Los Angeles-Long Beach-Santa Ana, Calif. ..| 91 | 75 | 13,719 | 8,027 Detriot-Warren-Livonia, Mich. .............| 17 | 35 | 3,458 | 6,459 New York-Northern New Jersey-Long | | | | Island, N.Y.-N.J.-Pa. ....................| 45 | 20 | 6,394 | 4,139 San Francisco-Oakland-Fremont, Calif. .....| 19 | 28 | 1,518 | 3,678 Salt Lake City, Utah ......................| 4 | 6 | 541 | 3,245 Riverside-San Bernardino-Ontario, Calif. ..| 20 | 25 | 2,922 | 3,065 Philadelphia-Camden-Wilmington, Pa.-N.J.- | | | | Del.-Md. .................................| 22 | 18 | 2,587 | 3,030 Miami-Fort Lauderdale-Pompano Beach, Fla. .| 12 | 22 | 2,378 | 3,022 Cincinnati-Middletown, Ohio-Ky.-Ind. ......| 3 | 7 | 1,000 | 2,509 | | | | -------------------------------------------------------------------------------- r = revised. p = preliminary. NOTE: The geographic boundaries of the metropolitan areas shown in this table are defined in Office of Management and Budget Bulletin 08-01, November 20, 2007. Geographic Distribution Among the 4 census regions, the West recorded the highest number of separations (119,388) due to extended mass layoff events in the second quarter of 2008, followed by the Midwest (86,410). (See table 4.) Separations in the West, which reached a program high this quarter, occurred largely in amusements, gambling, and recreation and in credit intermediation and related activities. The West accounted for 40 per- cent of all separations, up from 34 percent in the same period last year. Among the 9 census divisions, the highest number of separations during the second quarter of 2008 was in the Pacific (92,614). The East North Central division had the next-highest level of separations (72,140). (See table 4.) California recorded the largest number of worker separations (77,751), followed by Illinois (26,475), Ohio (19,683), and Florida (17,216). (See table 5.) After excluding the substantial impact of seasonal reasons, California still reported the highest number of job cuts (59,685), the highest second quarter level since 2003. California accounted for 26 percent of all separations in the second quarter of 2008, up from 21 percent in 2007. Illinois ac- counted for 9 percent of the separations in the second quarter of 2008, about the same as last year (8 percent). Forty-seven percent of events and 37 percent of separations (109,698) occurred in metropolitan areas in the second quarter of 2008, compared with 51 percent of events and 39 percent of separa- tions (107,310) during the second quarter of 2007. Among the 369 metropolitan areas, Chicago-Naperville-Joliet, Ill.-Ind.-Wis., reported the highest number of separations (8,603) in the second quarter of 2008. Next were Los Angeles-Long Beach-Santa Ana, Calif., with 8,027 separations and Detroit-Warren-Livonia, Mich., with 6,459 separations. (See table G.) Employers located in nonmetropolitan areas separated 29,857 workers in extended mass layoffs. Note The quarterly series on extended mass layoffs cover layoffs of at least 31-days duration that involve 50 or more individuals from a single employer filing initial claims for unemployment insurance during a consecutive 5-week period. Approximately 30 days after a mass layoff is triggered, the employer is contacted for additional information. Data for the second quarter are preliminary and sub- ject to revision. This release also includes revised data for pre- vious quarters. Data are not seasonally adjusted, but survey data suggest that there is a seasonal pattern to layoffs. Thus, compari- sons between consecutive quarters should not be used as an indicator of trend. For additional information about the program, see the Technical Note. ______________________________ The report on Mass Layoffs in July 2008 is scheduled to be released on Friday, August 22.
- Mass Layoffs Technical Note
- Table 1. Industry distribution: Extended mass layoff events, separations, and initial claimants for unemployment insurance, private nonfarm sector, selected quarters, 2007 and 2008
- Table 2. Reason for layoff: Extended mass layoff events, separations, and initial claimants for unemployment insurance, private nonfarm sector, selected quarters, 2007 and 2008
- Table 3. State and selected claimant characteristics: Extended mass layoff events and initial claimants for unemployment insurance, private nonfarm sector, first and second quarters, 2008
- Table 4. Census region and division: Extended mass layoff events, separations, and initial claimants for unemployment insurance, private nonfarm sector, selected quarters, 2007 and 2008
- Table 5. State distribution: Extended mass layoff events, separations, and initial claimants for unemployment insurance, private nonfarm sector, selected quarters, 2007 and 2008
- Table 6. Information technology-producing industries: Extended mass layoff events and separations, private nonfarm sector, 2001-2008
- Table 7. Industry distribution: Extended mass layoff events and separations associated with the movement of work, selected quarters, 2007 and 2008
- Table 8. Reason for layoff: Extended mass layoff events and separations associated with the movement of work, selected quarters, 2007 and 2008
- Table 9. Census region and division: Extended mass layoff events and separations associated with the movement of work, selected quarters, 2007 and 2008
- Table 10. Extended mass layoff events and separations, selected measures, selected quarters, 2007 and 2008
- Table 11. Movement of work actions by type of separation where number of separations is known by employers, selected quarters, 2007 and 2008
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Last Modified Date: August 15, 2008