Among the 7 categories of economic reasons for layoff, business demand accounted for the highest share of events (47 percent) and number of separa-
tions (79,358) in January-March 2008. Layoff activity attributed to business demand factors increased from the same period in 2007, when these reasons were cited in 39 percent of layoff events and involved 62,693 laid-off workers.
Since the collection of movement of work data began in 2004, a series low 47 extended mass layoff events associated with 8,856 separated workers were recorded in the first quarter of 2008. These events accounted for 5 percent of the nonseasonal layoff events and 6 percent of
the nonseasonal separations.
Permanent closure of worksites occurred in 12 percent of all extended mass layoff events and affected 33,103 workers during the first quarter of 2008. Forty-three percent of the employers reporting a layoff indicated they anticipated some type of recall. Of those employers expecting to recall workers, a record low 30 percent indicated that the offer would be extended to all employees. Extended mass layoffs without an expectation of recall occurred mainly in credit intermediation and related activities and in transportation equipment manufacturing.
The national unemployment rate averaged 5.3 percent, not seasonally adjusted, in the first quarter of 2008, up from 4.8 percent a year earlier. Private nonfarm payroll employment, not seasonally adjusted, increased by 0.4 percent, or
507,000 over the year.
Industry Distribution of Extended Layoffs
Manufacturing industries accounted for 31 percent of private nonfarm extended mass layoff events and 40 percent of related separations in the first quarter of 2008. The largest number of separations was in transportation equipment manufacturing (31,340, mostly associated with automobile manufacturing), followed by food manufacturing (9,478). A strike involving a transportation equipment manufacturer was a contributing factor in 55 percent of the separations in that industry.
The construction sector accounted for 26 percent of events and 16 percent of separations during January-March 2008, largely in specialty trade contracting and heavy and civil engineering construction. Layoffs in the retail trade sector accounted for 8 percent of all extended mass layoff events and 11 percent of separations and were concentrated in general merchandise stores.
Reasons for Extended Layoffs
Among the 7 categories of economic reasons for extended mass layoffs, events related to business demand factors (contract cancellation, contract completion,domestic competition, excess inventory, import competition, and slack work) accounted for 47 percent of the extended layoffs and resulted in 79,358 separations during the first quarter of 2008. Business demand job cuts were most numerous in transportation equipment manufacturing (motor vehicle manufacturing) and in specialty trade contracting (building equipment contractors). About one-quarter of all layoff events and separations were due to slack work, the highest proportion of events since first quarter 2002 and the highest proportion of separations since third quarter 2001. However, 11 percent of these slack work events and 42 percent of the associated separations were strike-related cutbacks in the transportation equipment manufacturing sector.
Job losses related to seasonal factors (seasonal and vacation period) accounted for 20 percent of the extended layoff events and resulted in 38,540 separations,primarily in food manufacturing and general merchandise stores.
Financial issues (bankruptcy, cost control, and financial difficulty) accounted for 10 percent of events and resulted in 22,972 separations. These layoffs were most common among workers in credit intermediation and related activities and in furniture and home furnishings stores.
Movement of Work
Since the collection of movement of work data began in 2004, a series low 47 extended mass layoff events associated with 8,856 separated workers were recorded in the first quarter of 2008. 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. A year earlier, there were 70 layoff events and 11,438 separations associated with the movement of work.
Among the 47 extended mass layoff events with reported relocation of work in the first quarter of 2008, 64 percent were permanent closures of worksites, which affected 6,566 workers. In comparison, 12 percent of the total extended mass layoff events reported for the quarter involved the permanent closure of worksites affecting 33,103 workers.
Of the layoffs involving the movement of work, 60 percent of the events and 53 percent of the laid-off workers were from manufacturing industries during the first quarter. Among all private nonfarm extended layoffs,manufacturing accounted for 31 percent of the events and 40 percent of the separations.
While 18 percent of the extended mass layoff events in the total private nonfarm economy were because of either financial issues or organizational changes,such reasons accounted for 66 percent of layoff events associated with work relocation and resulted in 6,012 separations during the first quarter.
Among the regions, the South accounted for the largest proportion of workers affected by extended mass layoffs associated with the movement of work (38 percent), followed by the West (28 percent), the Midwest (26 percent), and the Northeast (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 47 extended layoff events with movement of work for the first quarter of 2008 involved 59 identifiable 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 59 relocations, employers were able to provide information on the specific number of separations associated with the movement of work component of the layoff
in 36 actions involving 5,297 workers.
In the 36 actions where employers were able to provide more complete separations information, 86 percent of relocations (31 out of 36) occurred within the same company. Sixty-four percent of these relocations (23 out of 36) were domestic reassignments, while 36 percent involved out-of-country moves (13 out of 36). Domestic relocation of work-both within the company and to other companies-affected 4,116 workers. Out-of-country relocations were associated with the separation of 1,181 workers, 1 percent of all nonseasonal and nonvacation extended mass layoff separations.
Recall Expectations
Forty-three percent of employers reporting an extended layoff in the first quarter of 2008 indicated they anticipated some type of recall, up slightly from a year earlier. However, of those employers expecting to recall workers, a record low 30 percent indicated that the offer would be extended to all displaced employees. For events without an expectation of recall, the highest number of separations occurred in credit intermediation and related activities, in transportation equipment manufacturing, and in general merchandise stores. Seventy-two percent of employers expected to recall the laid-off employees within 6 months, a record low for the series. Seventy-five percent of employers anticipated extending the offer to at least half of the workers.
Excluding layoff events due to seasonal work and vacation period (in which 89 percent of the employers expected a recall), employers anticipated recalling laid-off workers in 32 percent of the events, up from 27 percent a year earlier.
Size of Extended Layoffs
The average size of a layoff (as measured by separations per layoff event) in the first quarter of 2008 was 170, compared to 203 per layoff in the first quarter of 2007. The average differed widely by industry, ranging from a low of 67 in leather and allied products to a high of 776 in motion picture and sound recording
industries.
Layoff events during January-March 2008 continued to be concentrated at the lower end of the extended layoff-size spectrum, with 71 percent of the events involving fewer than 150 workers. Layoffs involving less than 150 workers accounted for 36 percent of all separations during the period, compared to 29 percent in the first quarter of 2007. Separations involving 500 or more workers, while comprising only 4 percent of the events, accounted for 28 percent of all separations in the first quarter of 2008, down from 41 percent a year earlier.
Initial Claimant Characteristics
A total of 165,933 initial claimants for unemployment insurance were associated with extended mass layoffs in the first quarter of 2008. Of these claimants, 14 percent were black, 18 percent were Hispanic, 35 percent were women, 35 percent were 30 to 44 years of age, and 18 percent were 55 years of age or older. Among persons in the civilian 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 highest number of separations due to extended mass layoff events in the first quarter of 2008 was in the Midwest, with 71,890, followed by the West, with 65,141. Extended mass layoffs in the Midwest were largely in transportation equipment manufacturing and in administrative and support services. The Midwest region accounted for 38 percent of all separations, up from 25 percent in the same period last year. Thirty-five percent of the extended layoffs were reported by the West, a decrease from 46 percent in the first quarter of 2007.
Among the 9 census regions, the highest number of separations during the first quarter of 2008 was in the East North Central, with 63,758, followed by the Pacific, with 59,012. Extended mass layoffs in the East North Central division were largely in transportation equipment manufacturing.
California recorded the largest number of worker separations (55,469), followed by Ohio (19,420), Illinois (17,771), and Michigan (14,149). These four states accounted for 56 percent of total extended mass layoff events and 57 percent of total separations during the first quarter of 2008. After excluding the substantial impact of seasonal reasons, California still reported the highest number of job cuts (46,437), largely due to layoffs in specialty trade contractors and in heavy and civil engineering construction.
California accounted for 29 percent of all separations in January-March 2008, down sharply from 41 percent in 2007. Ohio accounted for 10 percent of the separations in the first quarter of 2008, up from 4 percent in 2007.
In the first quarter of 2008, Michigan reported the largest number of separations related to the transportation equipment manufacturing strike (7,107), followed by Ohio (6,760) and Indiana (4,580). Fifty-three percent of events and 49 percent of separations (92,165) occurred in
metropolitan areas in the first quarter of 2008, compared with 56 percent of events and 38 percent of separations (86,443) during the first quarter of 2007. Among the 369 metropolitan areas, Los Angeles-Long Beach-Santa Ana, Calif., reported the highest number of separations (11,454) in the first quarter of 2008. Next were Chicago-Naperville-Joliet, Ill.-Ind.-Wis., with 7,746 separations and New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa., with 5,660 separations. Employers located in nonmetropolitan areas separated 15,688 workers in extended mass layoffs.
