Technical information: (202) 691-6392 USDL 09-0151
http://www.bls.gov/mls/
For release: 10:00 A.M. (EST)
Media contact: (202) 691-5902 Friday, February 13, 2009
EXTENDED MASS LAYOFFS IN THE FOURTH QUARTER OF 2008
AND ANNUAL TOTALS FOR 2008
Employers initiated 3,140 mass layoff events in the fourth quarter
of 2008 that resulted in the separation of 508,859 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. Extended
mass layoff events and separations reached their highest levels in pro-
gram history (with data available back to 1995). The total number of
layoff events in the fourth quarter 2008 was 1,326 higher than the
same period a year earlier, and the number of associated separations
increased by 207,267 over the year. (See table A.) The construction
and manufacturing industries experienced record highs in both the num-
ber of layoff events and separations for any quarter in program history.
Separations due to business demand reasons more than doubled over the
year to 207,609, with those related specifically to slack work/insuf-
ficient demand more than tripling to 152,279. Forty-five percent of
employers reporting an extended layoff in the fourth quarter of 2008
indicated they anticipated some recall of workers, the lowest fourth
quarter proportion since 2001. Fourth quarter 2008 layoff data are
preliminary and are subject to revision. (See the Technical Note.)
The national unemployment rate averaged 6.6 percent, not seasonally
adjusted, in the fourth quarter of 2008, up from 4.6 percent a year
earlier. Private nonfarm payroll employment, not seasonally adjust-
ed, decreased by 2.0 percent (-2,362,000) over the year.
For all of 2008, the total number of extended mass layoff events
reached a program high at 7,818, and associated worker separations
were at its highest level since 2001 at 1,383,553. Four major indus-
try sectors reported program highs in terms of events and separations
in 2008--construction; finance and insurance; educational services; and
accommodation and food services (with annual data available back to
1996). In 2008, eight states reached program highs in terms of numbers
of separations--Alaska, California, Hawaii, Idaho, Indiana, Missouri,
New Jersey, and Wyoming. Additional information on the annual data is
available starting on page 6 of this release.
- 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 ....... 1,640 296,662 330,954
2007
January-March .......... 1,110 225,600 199,250
April-June ............. 1,421 278,719 259,234
July-September ......... 1,018 160,024 173,077
October-December (r) ... 1,814 301,592 347,151
2008
January-March (r) ...... 1,340 229,952 259,084
April-June (r) ......... 1,756 354,690 339,184
July-September (r) ..... 1,582 290,052 300,337
October-December (p) ... 3,140 508,859 463,715
r = revised.
p = preliminary.
Industry Distribution of Extended Layoffs
Manufacturing firms reported 1,103 extended mass layoff events in-
volving 185,686 separations, the highest levels for the industry on
record. Manufacturing industries were responsible for 35 percent of
private nonfarm extended layoff events and 36 percent of related
separations in the fourth quarter of 2008. A year earlier, manufac-
turing made up 24 percent of events and 27 percent of separations.
(See table 1.) The largest numbers of separations within manufac-
turing were associated with transportation equipment manufacturing
(56,341, mostly associated with automobile manufacturing) and food
manufacturing (21,863).
Construction firms recorded 843 extended mass layoff events and
100,922 separations, the highest levels for the industry on record.
While most construction layoff events were due to the end of seasonal
work and the completion of contracts, the number of layoff events due
to slack work/insufficient demand more than doubled over the year.
- 3 -
Table B. Distribution of extended layoff events and separations by
economic reason categories, October-December 2008(p)
Layoff events Separations
Category
Number Percent Number Percent
Total .................. 3,140 100.0 508,859 100.0
Business demand ............. 1,387 44.2 207,609 40.8
Organizational changes ...... 139 4.4 26,434 5.2
Financial issues ............ 300 9.6 65,034 12.8
Production specific ......... 21 0.7 3,694 0.7
Disaster/safety ............. 12 0.4 1,346 0.3
Seasonal .................... 808 25.7 135,500 26.6
Other/miscellaneous ......... 473 15.1 69,242 13.6
p = preliminary.
In the fourth quarter 2008, thirteen major industry sectors re-
ported fourth quarter program highs in terms of extended mass layoff
events--construction; manufacturing; wholesale trade; retail trade;
transportation and warehousing; real estate and rental and leasing;
management of companies and enterprises; administrative and waste
services; educational services; health care and social assistance;
arts, entertainment, and recreation; accommodation and food 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 (contract cancellation, contract com-
pletion, domestic competition, excess inventory, import competition, and
slack work) accounted for 44 percent of the extended layoff events and
41 percent of separations during the fourth quarter of 2008 (See table B.)
This compared to 34 percent of events and 28 percent of separations in the
same period a year earlier. Separations related to these business demand
factors more than doubled over the year from 83,996 to 207,609, with those
due to slack work/insufficient demand/nonseasonal business slowdown more
than tripling from 42,201 to 152,279. (See table 2.)
Job losses stemming from financial issues (bankruptcy, cost control,
and financial difficulty) more than doubled from 124 events associated
with 24,652 separations in the fourth quarter 2007 to 300 events and
65,034 separations in the fourth quarter 2008. These layoffs accounted
for 10 percent of the events and 13 percent of separations during the
fourth quarter of 2008, compared to 7 and 8 percent, respectively, a
year earlier. Seasonal factors (seasonal and vacation period) resulted
in 26 percent of the extended layoff events and 27 percent of the sepa-
rations in October-December 2008.
Movement of Work
In the fourth quarter of 2008, 110 extended mass layoffs involved
the movement of work and were associated with 24,236 separated workers.
(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 5 percent of nonseasonal layoff events in the fourth quarter of 2008.
A year earlier, there were 69 layoff events and 11,302 separations asso-
ciated with the movement of work. (See table 10.)
Among the 110 extended mass layoff events with reported relocation of
work in the fourth quarter of 2008, 64 percent were permanent closures of
worksites, which affected 16,849 workers. In comparison, 9 percent of
the total extended mass layoff events reported for the quarter involved
the permanent closure of worksites and affected 71,111 workers.
Of the layoffs involving the movement of work, 68 percent of the
events and 61 percent of the laid-off workers were from manufacturing
industries during the fourth quarter. (See table 7.) Among all pri-
vate nonfarm extended layoffs, manufacturing accounted for 35 percent
of the events and 36 percent of separations.
- 4 -
Table C. Extended mass layoff events and separations, selected measures,
fourth quarter 2008(p)
Action Layoff events Separations
Total, private nonfarm ................ 3,140 508,859
Total, excluding seasonal and
vacation events (1) ............... 2,332 373,359
Total events with movement
of work (2) ................... 110 24,236
Movement of work actions ...... 150 (3)
With separations reported .. 111 16,061
With separations unknown ... 39 (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.
While only 4 percent of the extended mass layoff events in the
total private nonfarm economy were because of organizational change,
such reasons accounted for 44 percent of layoff events associated with
work relocation and resulted in 8,706 separations during the fourth
quarter. (See table 8.)
Among the regions, the Midwest accounted for the largest proportion
of workers affected by extended mass layoffs associated with the move-
ment of work (59 percent), followed by the West and the South (16 percent
each). (See table 9.) Among the 50 states and the District of Columbia,
Ohio accounted for the largest proportion of workers affected by extended
mass layoffs associated with the movement of work (24 percent), followed
by Illinois (14 percent) and California (9 percent).
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 110 extended layoff events
with movement of work for the fourth quarter of 2008 involved 150 identi-
fiable relocations of work. 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 150
relocations, employers were able to provide information on the specific
number of separations associated with the movement of work component of
the layoff in 111 actions involving 16,061 workers. (See table 10.)
Of the 111 actions where employers were able to provide more complete
separations information, 90 percent of relocations occurred within the
same company and 70 percent of relocations were domestic reassignments.
(See table D.) Domestic relocation of work affected 12,286 workers, and
out-of-country relocations were associated with 3,775 separations, 1 per-
cent of all nonseasonal and nonvacation extended mass layoff separations.
(See table 11.)
- 5 -
Table D. Movement of work actions by type of separation where the
number of separations is known by employers, fourth quarter 2008(p)
Activities Actions(1) Separations
With separations reported .......... 111 16,061
By location
Out-of-country relocations ....... 33 3,775
Within company ................ 28 3,436
Different company ............. 5 339
Domestic relocations ............. 78 12,286
Within company ................ 72 6,844
Different company ............. 6 5,442
By company
Within company ................... 100 10,280
Domestic ...................... 72 6,844
Out of country ................ 28 3,436
Different company ................ 11 5,781
Domestic ...................... 6 5,442
Out of country ................ 5 339
1 Only actions for which separations associated with the movement of
work were reported are shown.
p = preliminary.
Recall Expectations
Forty-five percent of employers reporting an extended layoff in the
fourth quarter of 2008 indicated they anticipated some type of recall,
down from 56 percent a year earlier and the lowest fourth quarter propor-
tion since 2001. (See table E.) Of those employers expecting to recall
workers, 36 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-eight percent of em-
ployers expecting to recall laid-off employees intend to do so within 6
months. Excluding layoff events due to seasonal work and vacation period
in which 96 percent of the employers expected a recall, employers antici-
pated recalling laid-off workers in 43 percent of the events, the lowest
fourth quarter proportion since 1997.
Size of Extended Layoffs
The average size of a layoff (as measured by separations per layoff
event) in the fourth quarter of 2008 was 162, compared to 166 per layoff
in fourth quarter 2007. Layoff events continued to be increasingly con-
centrated at the lower end of the extended layoff-size spectrum, with 46
percent of events involving between 50 and 99 workers and 70 percent of
events with less than 150 workers. This was the fourth consecutive
fourth quarter that both of these proportions increased. Similarly, the
proportion of events involving more than 500 workers, less than 4 percent,
has also decreased each fourth quarter since 2004.
Layoffs involving between 50 and 99 workers accounted for 20 percent
of all separations during the period, and layoffs with less than 150 sepa-
rated workers accounted for 37 percent. These proportions are up from 18
and 36 percent from a year earlier, respectively, and have been increasing
for the last four consecutive fourth quarters. Separations involving 500
or more workers accounted for 24 percent of all separations in the fourth
quarter of 2008, up slightly from a year earlier. (See table F.)
- 6 -
Table E. Summary of employer expectations of a recall from extended layoff,
fourth quarter 2007-fourth quarter 2008
Percentage of events
Nature of the recall IV I II III IV
2007 2008 2008 2008(r) 2008(p)
Anticipate a recall ............. 55.8 40.1 51.1 28.6 44.8
Timeframe
Within 6 months ............. 87.9 69.8 84.5 71.0 78.0
Within 3 months .......... 34.2 45.4 59.1 53.8 34.1
Size
At least half ............... 90.5 73.2 88.3 77.0 78.9
All workers .............. 50.5 28.5 51.7 37.6 36.2
r = revised.
p = preliminary.
Initial Claimant Characteristics
A total of 463,715 initial claimants for unemployment insurance were
associated with extended mass layoffs in the fourth quarter of 2008. Of
these claimants, 12 percent were black, 16 percent were Hispanic, 30 per-
cent were women, 36 percent were 30 to 44 years of age, and 16 percent
were 55 years of age or older. (See table 3.) Among persons in the ci-
vilian labor force for the same period, 11 percent were black, 14 percent
were Hispanic, 47 percent were women, 33 percent were age 30 to 44, and
18 percent were 55 years of age or older.
Geographic Distribution
Among the 4 census regions, the Midwest recorded the highest number
of separations (202,392) due to extended mass layoff events in the
fourth quarter of 2008, followed by the West with 164,717. Both re-
gions recorded program highs in terms of numbers of separations in the
fourth quarter. (See table 4.) Among the 9 census divisions, the high-
est number of separations during the fourth quarter of 2008 was in the
East North Central division (156,100). The Pacific division had the next
highest level of separations with 132,747. (See table 4.) Five divi-
sions reported program highs in terms of numbers of separations in the
fourth quarter--the East North Central, West North Central, East South
Central, Mountain, and Pacific.
California recorded the largest number of worker separations (103,470),
followed by Illinois (55,229), Michigan (38,820), and Ohio (30,295). (See
table 5.) After excluding the impact of seasonal reasons, California still
reported the highest number of job cuts (88,075). Seventeen states reported
fourth quarter program highs in terms of numbers of separations--Arkansas,
California, Delaware, Florida, Idaho, Illinois, Indiana, Kentucky, Michigan,
Minnesota, Mississippi, Missouri, Nevada, Ohio, Oklahoma, Oregon, and Vermont.
Forty-six percent of extended mass layoff events and 43 percent of sepa-
rations (217,268) occurred in metropolitan areas in the fourth quarter of
2008, compared with 50 percent of events and 45 percent of separations
(136,573) during the fourth quarter of 2007. Among the 369 metropolitan
areas, Chicago-Naperville-Joliet, Ill.-Ind.-Wis., reported the highest num-
ber of separations (19,894) in the fourth quarter of 2008. Next were Detroit-
Warren-Livonia, Mich., with 14,714 separations and Los Angeles-Long Beach-
Santa Ana, Calif., with 12,438 separations. (See table G.) Employers lo-
cated in nonmetropolitan areas separated 62,879 workers in extended mass
layoffs.
Review of 2008
For all of 2008, employers reported 7,818 extended mass layoff actions,
affecting 1,383,553 workers. Compared to 2007, the number of events was
up 46 percent (+2,455 from 5,363), and the number of separations increased
by 43 percent (+417,618 from 965,935). (See table H.) The annual average
national unemployment rate increased from 4.6 percent in 2007 to 5.8 per-
cent in 2008, and private nonfarm payroll employment decreased by 0.7 per-
cent, or 812,000.
- 7 -
Table F. Distribution of extended layoff events by size of layoff,
fourth quarter 2008(p)
Layoff events Separations
Size
Number Percent Number Percent
Total ..................... 3,140 100.0 508,859 100.0
50-99 ................... 1,447 46.1 100,859 19.8
100-149 ................. 737 23.5 86,250 16.9
150-199 ................. 320 10.2 52,983 10.4
200-299 ................. 335 10.7 77,182 15.2
300-499 ................. 184 5.9 67,198 13.2
500-999 ................. 81 2.6 54,916 10.8
1,000 or more ........... 36 1.1 69,471 13.7
p = preliminary.
In 2008, employers expected a recall in 42 percent of the mass layoff
events, down from 50 percent of events in 2007. Eleven percent of extended
events in 2008 were permanent closures, the same proportion as in 2007.
Permanent closures were most numerous in the manufacturing industry, pri-
marily in transportation equipment manufacturing, and in retail trade, pri-
marily in general merchandise stores. When compared with 2007, events as-
sociated with permanent closures in 2008 increased 45 percent from 594 to
860, and separations increased 65 percent from 125,836 to 208,103.
Industry Distribution of Extended Layoffs
In 2008, four major industry sectors reported program highs in terms of
extended mass layoff events and separations--construction; finance and in-
surance; educational services; and accommodation and food services. Manu-
facturing industries had the largest share of extended mass layoff events
and separations (31 percent each). Within manufacturing, separations
were most numerous in transportation equipment manufacturing (133,474,
mainly in automobile manufacturing) and in food manufacturing (61,295,
largely in fruit and vegetable canning). The largest over-the-year increases
occurred in transportation equipment manufacturing (+73,560) and food manu-
facturing (+17,735). The construction sector accounted for 21 percent of
all events and 14 percent of the associated separations in 2008. Separa-
tions were concentrated in specialty trade contracting (78,983) and heavy
and civil engineering construction (77,609).
Reasons for Extended Layoffs
From 2007 to 2008, the number of extended mass layoff events increased
in all seven categories of economic reasons for layoffs. In 2008, job
losses related to business demand accounted for the largest proportion of
extended mass layoff activity. Events related to business demand increased
69 percent over the year from 1,888 to 3,195 and associated separations
nearly doubled from 248,056 to 476,302. In 2008, layoffs due to business
demand factors occurred primarily in transportation equipment manufacturing,
administrative and support services, and specialty trade contracting.
- 8 -
Table G. Mass layoff events and separations, selected metropolitan areas
Events Separations
Metropolitan area IV IV IV IV
2007(r) 2008(p) 2007(r) 2008(p)
Total, nonmetropolitan areas .................... 225 409 41,331 62,879
Total, 369 metropolitan areas ................... 914 1,452 136,573 217,268
Chicago-Naperville-Joliet, Ill.-Ind.-Wis. ... 100 114 15,687 19,894
Detroit-Warren-Livonia, Mich. ............... 45 96 9,541 14,714
Los Angeles-Long Beach-Santa Ana, Calif. .... 92 112 12,518 12,438
Minneapolis-St. Paul-Bloomington,
Minn.-Wis. ............................ 37 59 5,874 10,676
New York-Northern New Jersey-Long Island,
N.Y.-N.J.-Pa. ......................... 60 39 9,673 7,306
San Francisco-Oakland-Fremont, Calif. ....... 35 52 2,979 6,394
St. Louis, Mo.-Ill. ......................... 11 24 1,352 6,208
Las Vegas-Paradise, Nev. .................... 7 37 1,817 6,205
San Jose-Sunnyvale-Santa Clara, Calif. ...... 16 29 3,591 4,870
Rockford, Ill. .............................. 7 12 1,224 4,179
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.
Job loss due to seasonal factors remained nearly unchanged, but the
relative proportion of these layoffs dropped significantly due to higher
layoff activity related to other reasons. Seasonal layoffs occurred largely
among food services and drinking places; heavy and civil engineering con-
struction; transit and ground passenger transportation; and professional
and technical services.
Movement of Work
In 2008, there were 324 extended mass layoff events that involved work
moving within the same company or to a different company, domestically
or out of the U.S. The events involving movement of work were associated
with the separation of 64,805 workers, about 6 percent of all separations
resulting from nonseasonal/nonvacation extended mass layoff events. Sixty
percent of events with movement of work involved the permanent closure
of a worksite, affecting 42,779 workers. Manufacturing industries accounted
for 66 percent of the events and 62 percent of the separations involving
movement of work, mostly in transportation equipment manufacturing and in
computer and electronic product manufacturing. Among the regions, the
Midwest accounted for the largest proportion of laid-off workers associated
with the movement of work (45 percent), followed by the South (22 percent).
As part of the 324 layoff events, 432 identifiable movement-of-work
actions were taken by employers. Employers were able to provide informa-
tion on specific separations associated with the movement-of-work component
of the layoff in 308 actions (out of the 432), which totaled 39,218 laid-
off workers. Of these movement-of-work actions for which complete informa-
tion is available, 70 percent were to other locations within the U.S., and
89 percent involved moving work within the company. The separation of
11,147 workers was associated with out-of-country relocations, which ac-
counts for 28 percent of the separations related to the movement of work
and 1 percent of all separations in nonseasonal/nonvacation extended mass
layoff events.
Geographic Distribution
Compared to 2007, all 4 geographic regions reported an increase in
workers separated due to extended mass layoffs in 2008, with the largest
increase in the Midwest (+149,800). The Midwest reported more workers af-
fected by extended mass layoffs in 2008 (428,283) than any other region.
In the Midwest, transportation equipment manufacturing and administrative
and waste services had the largest number of separations. The Northeast
region reported the lowest annual number of separations with 216,060.
- 9 -
Table H. Selected measures of mass layoff activity, 1996-2008
Period Layoff events Separations Initial claimants
1996 ................ 4,760 948,122 805,810
1997 ................ 4,671 947,843 879,831
1998 ................ 4,859 991,245 1,056,462
1999 ................ 4,556 901,451 796,917
2000 ................ 4,591 915,962 846,267
2001 ................ 7,375 1,524,832 1,457,512
2002 ................ 6,337 1,272,331 1,218,143
2003 ................ 6,181 1,216,886 1,200,811
2004 ................ 5,010 993,909 903,079
2005 ................ 4,881 884,661 834,533
2006 (r) ............ 4,885 935,969 951,155
2007 (r) ............ 5,363 965,935 978,712
2008 (p) ............ 7,818 1,383,553 1,362,320
r = revised.
p = preliminary.
Among the 50 states and the District of Columbia, California reported
the largest number of separated workers in 2008 (330,003). States with
the next highest number of separations due to extended mass layoffs were
Illinois (119,692), Florida (88,213), Ohio (78,852), and Michigan (72,946).
California recorded the largest over-the-year increase in the number of
separations (+72,697), while Virginia recorded the largest over-the-year
decrease in separations (-4,569). Eight states reported program highs in
terms of numbers of separations in 2008--Alaska, California, Hawaii, Idaho,
Indiana, Missouri, New Jersey, and Wyoming.
Among the 369 metropolitan areas, Chicago-Naperville-Joliet, Ill.-Ind.-
Wis., reported the highest number of separations, 46,455. The next highest
numbers of separations were in Los Angeles-Long Beach-Santa Ana, Calif.,
with 45,904 and New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.,
with 39,182. Employers located in nonmetropolitan areas separated 135,626
workers in mass layoffs during 2008, up from 106,129 in 2007.
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 fourth quarter are
preliminary and subject to revision. This release also includes revised data
for previous quarters. Data are not seasonally adjusted, but survey data sug-
gest that there is a seasonal pattern to layoffs. Thus, comparisons 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 January 2009 is scheduled to be released
on Wednesday, February 25.
