Ho Hum Employment News: Mass Layoffs in Steep Decline
There are two sources for info on “mass layoffs,” defined as announcements (mandated by law) of workforce reductions of 50 or more employees.
The first is the more well-known but less rigorous monthly announcement from the outplacement firm Challenger, Gray & Christmas:
“With the American economy at full employment for the first time since Sept. 11, 2001, the latest job-cut data provide strong evidence that employers turned their energy toward retention in 2006,” said John A. Challenger, chief executive of Challenger, Gray & Christmas.
“Even as the economy slowed in the last half of the year due to weakness in the housing market, we did not see the typical spike in fourth-quarter job cuts,” he added.
For the whole of 2006, planned job cuts totaled 839,832, approximately 22% less than the 1.07 million cuts for 2005. The report said it was the first time since 2000 that annual job-cut announcements totaled less than one million.
Your humble servant did a bit of digging and found that 2000’s figure was 613,960. Layoffs accelerated in 2001 as the tech bubble burst and the 9/11 attacks occurred. Also, according to this MarketWatch article (free registration required):
(mass layoffs reported by Challenger Gray) peaked at 1.96 million in 2001. They fell to 1.07 million in 2005.
….. Planned reductions in the fourth quarter were down 30% on a year-over-year basis, amounting to 200,593 vs. 288,593 in 2005.
The more detailed and complete report comes from the US Bureau of Labor Statistics, and tracks initial unemployment claims filed by workers who were part of mass layoffs. These numbers come in higher than Challenger Gray’s because the outplacement firm doesn’t catch all of the announcements made, and some of the announcements don’t get reported by the press.
The latest version of the report runs through November. Here’s what it shows for the past four years ending on November 30:
Dec. 1, 2002 - Nov. 30, 2003 — 2,000,770
Dec. 1, 2003 - Nov. 30, 2004 — 1,470,479
Dec. 1, 2004 - Nov. 30, 2005 — 1,572,887
Dec. 1, 2005 - Nov. 30, 2006 — 1,296,176
Either way you look at it, the mass layoff numbers have come down very nicely.
