Reasons for Extended Layoff
Layoffs due to the completion of seasonal work accounted for 20 percent of the extended layoff events and resulted in 24,184 separations in the third quarter. Seasonal layoffs were most numerous among workers in transit and ground passenger transportation, in food manufacturing, and in social assistance.Internal company restructuring (due to bankruptcy, business ownership change, financial difficulty, and reorganization) accounted for 25 percent of layoff events and resulted in 43,680 separations, the lowest for a third quarter since 1997. These layoffs were mostly among workers in credit intermediation and related activities and in food and beverage stores. Over half of both the internal company restructuring layoff events and separations were due to reorganization within the company.
Movement of Work
Between July and September of 2004, 77 extended mass layoff events involved the movement of work; this was about 13 percent of total extended mass layoff events, excluding those for seasonal and vacation reasons. These movements of work were to other U.S. locations or to locations outside of the U.S., and they occurred either within the same company or to other companies. The extended mass layoff events involving movement of work were associated with the separation of 16,091 workers, about 15 percent of all separations resulting from nonseasonal/nonvacation mass layoff events. Revised data from the second quarter of 2004 show that there were 86 extended mass layoff events and 16,240 separations involving the movement of work. The first quarter of 2004 marked the initial reporting of job loss data relating to the movement of work in the Bureau's Mass Layoff Statistics program.Among the 77 extended mass layoff events with reported relocation of work, 62 percent were permanent closures of worksites, which affected 11,864 workers. In comparison, for the 780 total layoff events reported for the third quarter of 2004, only 21 percent involved the permanent closure of worksites.
Of the layoffs involving the movement of work, 69 percent of the events and 67 percent of the laid-off workers were from manufacturing industries during the third quarter of 2004. Among all private nonfarm extended layoffs, manufacturing accounted for 34 percent of the events and 32 percent of the separations.
Internal company restructuring (bankruptcy, business ownership change, financial difficulty, and reorganization) accounted for 69 percent of layoff events associated with work relocation and resulted in 11,643 separations during the third quarter. Most of these were due to reorganization within the company. In contrast, only 25 percent of the layoff events in the total private nonfarm economy were because of internal company restructuring.
Among the regions, the Midwest accounted for the largest proportion of workers in extended mass layoffs associated with the movement of work (56 percent) in the third quarter of 2004, followed by the South (19 percent), the Northeast (13 percent), and the West (11 percent).
The 77 extended mass layoff events discussed above involve 95 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 move. Some extended mass layoff events involve more than one relocation of work action. For example, an extended mass layoff event at an establishment 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 relocation of work actions.) Almost 9 in 10 relocations (84 out of 95) associated with movement of work occurred among establishments within the same company. In 75 percent of these relocations, the work activities were reassigned to places elsewhere in the U.S. Just over one-fifth of the movement-of-work situations involved out-of-country moves (21 out of 95). More than three-fourths of these (16 relocations) were within the same company. In the 11 situations where work activities were reassigned to another company under contractual arrangements, half involved relocation of work to companies within the U.S. and half to companies outside of the U.S.
