Extended Mass Layoffs Head South during Q403

February 12, 2004 (PLANSPONSOR.com) -The number of extended mass layoffs at US employers took a dramatic drop the fourth quarter of 2003, compared to the same period a year earlier, the government announced Thursday.

According to the Bureau of Labor Statistics (BLS) in the US Department of Labor, companies initiated 1,956 layoffs of 359,085 workers during the final quarter, down 13.3% in layoffs and 23.5% in the number of separations. However, the data took a dramatic jump in the fourth quarter, compared to the quarter before. When compared to the July to September period, the number of layoffs was up 34.1% over the third quarter and 19.3% higher in the number of affected workers

BLS said the latest data represented the lowest level for a fourth quarter since 1999. The decline over the year was most notable in general merchandise stores, computer and electronic product manufacturing, and machinery manufacturing. BLS defines an extended mass layoff as one lasting at least 31 days.


The completion of seasonal work accounted for 50% of all layoffs and 198,054 separations during the final quarter.   Layoffs due to internal company restructuring represented 14% of layoffs and resulted in 49,091 separations, both lower than a year earlier.   Permanent closure of work sites occurred in 10% of all layoffs and affected 31,711 workers, the lowest level for any fourth quarter.   Forty percent of the employers anticipating a recall expected to extend the offer to all laid-off workers, the highest proportion for a fourth quarter since 2000, BLS said.


At year-end 2003, the total of extended mass layoff layoffs was 7,245 and the total number of worker separations was 1,452,427.   These annual totals were lower than in 2002, (7,295 and 1,546,976, respectively).   Since their peak in 2001, the annual year-end number of extended layoffs has fallen by 1,104, or 13%, and the number of separations has declined by 298,941, or 17%, the government reported.


Manufacturing industries accounted for 26% of private-sector layoffs and 24% of separations during October-December 2003.   The 83,438 worker separations in manufacturing were the lowest for any fourth quarter since the government’s mass layoff studies began in 1995.   Layoff activity in this sector was concentrated in food manufacturing (26,167, largely in the highly seasonal fruit and vegetable canning industry), followed by nonmetallic mineral product manufacturing (7,429), transportation equipment manufacturing (5,959), and computer and electronic product manufacturing (5,667).


Agriculture, forestry, fishing and hunting accounted for 16% of private-sector layoffs and 21% of separations, with nearly all layoff activity concentrated in agriculture and forestry support activities.   Layoffs in construction comprised 24% of layoffs and 18% of separations, mostly in highway, street, and bridge construction. Cutbacks in administrative and waste services accounted for 10% of layoffs and 9% of separations, mainly in temporary help services. The retail trade sector accounted for an additional 4% of layoffs and 7% of separations during the quarter, primarily in supermarkets and other grocery stores.


Layoffs in government establishments accounted for 3% of all layoffs and separations during the final quarter, mostly in the executive, legislative and general government and in the administration of environmental programs.

Sixty-two percent of employers reporting an extended layoff in the fourth quarter of 2003 indicated they anticipated some type of recall.   This compares with 56% of the employers anticipating a recall a year earlier. Most of the employers not expecting a recall were in administrative and support services, transportation equipment manufacturing, and computer and electronic product manufacturing.


Layoffs during the fourth quarter continued to be concentrated at the lower end of the extended layoff-size spectrum, with 61% involving fewer than 150 workers.   These layoffs, however, accounted for only 29% of all separations. Separations involving 500 or more workers accounted for 25% of all separations, down from 31% a year earlier.   The average size of layoffs (as measured by separations per layoff event) differed widely by industry, ranging from a low of 82 separations in nursing and residential care facilities to a high of 726 in food and beverage stores.