In the third quarter of 2004, 780 mass layoff actions were taken by employers that resulted in the separation of 131,452 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 the total number of layoff events and the number of separations were sharply lower than in July-September 2003 and were the lowest for a third quarter since the program began in 1995. The declines over the year were most notable in administrative and support services, food manufacturing, and textile mills. Extended mass layoffs that involve the movement of work within the same company or to a different company, domestically or outside the U.S., occurred in about 13 percent of the nonseasonal layoff events and accounted for about 15 percent of the worker separations in nonseasonal events. In the third quarter of 2004, the national unemployment rate was 5.4 percent, not seasonally adjusted; a year earlier it was 6.0 percent. Private nonfarm payroll employment, not seasonally adjusted, increased by 1.5 percent or 1,679,000 jobs from July-September 2003 to July-September 2004.
Layoffs due to internal company restructuring (bankruptcy, business ownership change, financial difficulty, and reorganization) represented 25 percent of events and resulted in 43,680 separations, the lowest level for a third quarter since 1997. The completion of seasonal work accounted for 20 percent of all events and resulted in 24,184 separations during the period--the lowest level for any third quarter since data became available in 1995. Permanent closure of worksites occurred in 21 percent of all events and affected 35,109 workers, the lowest third-quarter level since 1997.
Industry Distribution of Extended Layoffs
Extended mass layoff separations occurred in 303 of the 1,197 detailed industries for which data are available for the third quarter 2004. This is the fewest number of industries to have at least one extended mass layoff event in a third quarter since 1995.Manufacturing industries accounted for 34 percent of private nonfarm layoff events and 32 percent of separations during July-September 2004. The 41,982 worker separations in manufacturing were the fewest for manufacturing for any quarter since 1995. In third quarter 2004, layoff activity in this sector was concentrated in food manufacturing (7,704), followed by transportation equipment manufacturing (7,526) and fabricated metal products (3,406).
Administrative and waste services accounted for 13 percent of private nonfarm layoff events and 15 percent of separations, primarily in temporary help services (10,072). Layoffs in the retail trade sector comprised 7 percent of events and 9 percent of separations, mostly among food and beverage stores and in general merchandise stores. Cutbacks in finance and insurance accounted for 4 percent of events and 8 percent of separations, mainly in credit intermediation and related activities. The construction sector accounted for 10 percent of events and 7 percent of separations during the quarter, mostly among specialty trade contractors. Transportation and warehousing accounted for 7 percent of events and 6 percent of separations during the quarter, primarily in school and employee bus transportation.
Information technology-producing industries (communication equipment, communications services, computer hardware, and software and computer services) accounted for 5 percent of layoff events and 6,677 worker separations in the third quarter, down from 8 percent of layoff events and 14,814 separations for the same period a year ago. This also marked the fewest number of separations in the industry grouping for a third quarter since 2000. Layoffs in the information technology-producing industries were most numerous in communications services with 2,979 separations, followed by the computer hardware industry.
