Reasons for Extended Layoff
Layoffs due to the completion of seasonal work accounted for 47 percent of the extended layoff events and resulted in 118,684 separations in the fourth quarter, 50 percent of the total. This marked the first time that as much as half of the separations were due to seasonal layoffs. Seasonal layoffs were most numerous among workers in heavy and civil engineering construction, in food manufacturing, and in general merchandise stores.Internal company restructuring (due to bankruptcy, business ownership change, financial difficulty, and reorganization) accounted for 15 percent of layoff events and resulted in 36,266 separations. These layoffs were mostly among workers in credit intermediation and related activities, transportation equipment manufacturing, and food manufacturing. Over half of both the internal company restructuring layoff events and separations were due to reorganization within the company.
Movement of Work
Between October and December of 2004, 74 extended mass layoff events involved the movement of work; this was about 11 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 16,361 workers, about 14 percent of all separations resulting from nonseasonal/nonvacation mass layoff events. Revised data from the third quarter of 2004 show that there were 84 extended mass layoff events and 17,400 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 74 extended mass layoff events with reported relocation of work in the fourth quarter of 2004, 74 percent were permanent closures of worksites, which affected 12,623 workers. In comparison, for the 1,295 total layoff events reported for the fourth quarter of 2004, only 12 percent involved the permanent closure of worksites.
Of the layoffs involving the movement of work, 70 percent of the events and 72 percent of the laid-off workers were from manufacturing industries during the fourth quarter of 2004. Among all private nonfarm extended layoffs, manufacturing accounted for 31 percent of the events and 30 percent of the separations.
Internal company restructuring (bankruptcy, business ownership change, financial difficulty, and reorganization) accounted for 68 percent of layoff events associated with work relocation and resulted in 10,369 separations during the fourth quarter. Most of these were due to reorganization within the company. In contrast, only 15 percent of the layoff events in the total private nonfarm economy were because of internal company restructuring.
Among the regions, the South accounted for the largest proportion of workers in extended mass layoffs associated with the movement of work (42 percent) in the fourth quarter of 2004, followed by the Midwest (22 percent), the Northeast (19 percent), and the West (17 percent).
