Extended Layoffs Down in Q3

November 20, 2003 (PLANSPONSOR.com) - The number of long-term mass layoffs and the number of involved workers both plummeted during the third quarter, the US Department of Labor's Bureau of Labor Statistics (BLS) announced.

According to BLS data, US employers initiated 1,375 extended mass layoffs during the July to September period, down 35.4% from Q2, which affected 268,020 people, down 41.4% from the previous quarter.BLS defines and extended mass layoffs as those involving 50 or more workers applying for jobless benefits from one employer within a five-week period with the workers separated for more than 30 days.

Both the total number of layoffs and the number of affected workers were lower than Q3 2002 and were the lowest for a third quarter since 2000. The decline from third quarter 2002 was most notable in computer and electronic-product manufacturing, truck transportation, and general merchandise stores.

The completion of seasonal work accounted for 22% of layoffs and 74,805 workers during the period – the lowest level for a third quarter since 1998.   Layoffs due to internal company restructuring represented 22% of events and resulted in 57,727 separations, both lower than a year earlier.   Permanent closure of worksites occurred in 14% of all events and affected 46,646 workers.   A year earlier, such closures occurred in 21% of all events and affected 80,152 workers.   Forty percent of the employers anticipating a recall expected to extend the offer to all laid-off workers, the highest proportion for a third quarter since 2000.


Extended mass layoff separations occurred in 441 of the 1,197 detailed industries for which data are available.   Manufacturing industries accounted for 35% of private-sector layoffs and 34% of affected workers during July to September 2003.   The 82,030 worker separations in manufacturing were lower than in the third quarter of 2002. Layoff activity in this sector was concentrated in food manufacturing (18,422, largely in the highly seasonal fruit and vegetable canning industry), followed by transportation equipment (9,955), computer and electronic product manufacturing (7,175), and textile mills (7,005).


Agriculture, forestry, fishing and hunting accounted for 10% of private-sector layoffs and 14% of separations, with nearly all layoff activity concentrated in agriculture and forestry support activities. Layoffs in administrative and waste services comprised 10% of events and 13% of separations, almost entirely in temporary help services.   Cutbacks in retail trade accounted for 5% of events and 7% of affected workers, mainly in supermarkets and other grocery stores. The transportation and warehousing sector accounted for an additional 6% of events and separations during the quarter, primarily from school and employee bus transportation.   


Layoffs in government establishments accounted for 9% of all events and separations, the highest third-quarter share of events and separations since the mass layoff series began in second quarter 1995. Layoffs in the government sector were primarily concentrated in elementary and secondary schools.

Layoffs due to the completion of seasonal work accounted for 22% of the extended layoff events and affected 74,805 workers in the third quarter. This marked the lowest level of affected workers for a third quarter since 1998.   Seasonal layoffs were most numerous among workers in agriculture and forestry support activities (largely among farm labor contractors and crew leaders), food manufacturing (mainly in fruit and vegetable canning), and in crop production (mostly in grape vineyards and in strawberry farming).


Internal company restructuring (bankruptcy, business ownership change, financial difficulty, and reorganization) accounted for 22% of layoff events and resulted in 57,727 separations.   These layoffs were mostly among workers in textile mills, in credit intermediation and related activities, and in food and beverage stores.   In the third quarter of 2002, layoffs for these reasons represented 29% of events and involved 98,292 workers.