Extended Mass Layoffs in the Fourth Quarter of 2004

The 74 extended layoff events for tht fourth quarter of 2004 discussed above involve 124 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 movement. 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.) Of the 124 relocations, employers were able to provide information on the specific separations (12,152 workers) associated with the movement of work component of the layoff in 88 actions, or 71 percent of the total actions for the fourth quarter of 2004. Thus, a range of 12,152 (separations in movement of work actions where the employer was able to provide specific detail) to 16,361 (total separations in all layoff events that included movement of work) is established for separations due to the movement of work in the fourth quarter.

In the 88 actions where employers were able to provide more complete separation information, 9 in 10 worker separations associated with the movement of work (11,011 out of 12,152) occurred among establishments within the same company. In 57 percent of these separations, the work activities were reassigned to places elsewhere in the U.S. Just over one-third of the movement-of-work situations involved out-of-country moves (31 out of 88). The separation of 5,134 workers was associated with out-of-country relocations--slightly more than two-fifths of all separations related to the movement of work and about 4 percent of all nonseasonal/nonvacation extended mass layoff separations. Domestic relocation of work--both within the company and to other companies--affected 7,018 workers.

Recall Expectations

Sixty-five percent of employers reporting an extended layoff in the fourth quarter of 2004 indicated they anticipated some type of recall. This compares with 58 percent of the employers anticipating a recall a year earlier and is the highest proportion for a fourth quarter since 1997. Most of the employers not expecting a recall were in administrative and support services, transportation equipment manufacturing, and computer and electronic product manufacturing.

Among establishments expecting a recall, most employers expected to recall over one-half of the separated employees and to do so within 6 months. Forty-eight percent of the employers expected to extend the offer to all laid-off workers, the highest proportion for a fourth quarter since 2000.

Excluding layoff events due to seasonal work and vacation period (in which 98 percent of the employers expected a recall), employers expected to recall laid-off workers in 36 percent of the events. A year earlier, 29 percent of employers expected a recall in nonseasonal and nonvacation events. In layoff events due to internal company restructuring, employers anticipated a recall in only 4 percent of the events.

Size of Extended Layoff

Layoff events during the fourth quarter continued to be concentrated at the lower end of the extended layoff-size spectrum, with 61 percent involving fewer than 150 workers. These events, however, accounted for only 30 percent of all separations. Separations involving 500 or more workers accounted for 25 percent of all separations, not very different from a year earlier. The average size of layoffs (as measured by separations per layoff event) differed widely by industry, ranging from a low of 93 separations in chemical manufacturing to a high of 781 in nonstore retailers.

Initial Claimant Characteristics

A total of 178,834 initial claimants for unemployment insurance were associated with extended mass layoffs in the fourth quarter of 2004. Of these claimants, 11 percent were black, 17 percent were Hispanic, 34 percent were women, and 16 percent were 55 years of age or older. Thirty-eight percent of claimants were 30 to 44 years of age. Among the civilian labor force for the same period, 11 percent were black, 13 percent were Hispanic, 46 percent were women, and 16 percent were 55 years of age or older. Thirty-six percent of the civilian labor force were ages 30 to 44.

Geographic Distribution

In the fourth quarter, the number of separations due to extended mass layoff events was highest in the Midwest (94,478), followed by the West (61,731), the South (41,776), and the Northeast (38,652). Extended mass layoffs in the Midwest were mainly in heavy and civil engineering construction, administrative and support services, and specialty trade contractors.