Mass layoffs hit seven-year high

Sweeping layoffs hit manufacturing and Midwest in 2008: government.

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By Aaron Smith, staff writer

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NEW YORK ( -- Mass layoffs hit a seven-year high in 2008, with most of the job casualties occurring in the Midwest and in factories, according to the U.S. government.

Mass layoffs, involving 50 or more job cuts in a single sweep, totaled 21,137 last year, said the Labor Department on Wednesday, the highest tally since 2001. This is up from about 15,493 mass layoffs in 2007.

"Corporations have really tightened up their belts," said Oscar Gonzalez, economist with John Hancock Financial Services.

Initial jobless claims from mass layoffs totaled more than 2.1 million in 2008, up from about 1.6 million in 2007, and the highest figure in six years. The largest number of layoffs occurred in the Midwest, with more than 676,000 jobs lost en masse.

"It was a really bad year, and you can see it in all the big increases in layoffs," said David Wyss, chief economist for Standard & Poor's, who projects that the economy will lose another 2 million jobs in 2009, after shedding 2.6 million last year (including all types of job cuts, not just mass layoffs).

Not surprisingly, temporary workers were the hardest hit, with nearly 135,000 jobless claims from mass layoffs filed in 2008, up from about 97,000 the prior year.

Professional employer organizations, jumped to 54,000 jobless claims from mass layoffs, from 31,000 in 2007.

Vehicle manufacturing was a hard-hit area, with some 127,000 jobless claims en masse, up from about 99,000 in 2007. In its report, the Labor Department split this into three industries -- automobile, heavy duty truck, and light truck and utility vehicle. This last industry accounted for much of the increase, surging to more than 38,000 claims in 2008, from about 16,000 the prior year.

Labor Department economist Shannon Branscome said that light truck and utility vehicle manufacturing made the "top 10" list for industries leading with mass layoffs in 2008. In the prior year, it ranked 14th.

School and employee bus transportation claims from mass layoffs totaled 79,000, up from about 76,000 the prior year. Wyss of Standard & Poor's said this stems from cut-backs in the school systems as a result of budget-tightening.

The increase in unemployment claims resulting from mass layoffs for elementary and secondary school workers was even more dramatic, jumping to 29,000 in 2008, from about 20,000 the year before.

Job cuts from mass layoffs in the motion picture and video production industry totaled about 45,000 in 2008, a decrease from more than 51,000 the prior year.

Wyss said that Hollywood-related mass layoffs are typically in the "top 10" because the industry is "episodic."

"[Film industry workers] are contractors for very short periods of time," said Wyss. "Very few people have permanent jobs in the industry."

In the latest case of mass layoffs, airplane manufacturer Boeing (BA, Fortune 500) announced 10,000 job cuts on Wednesday, including its previously-announced 4,500. In a particularly severe round of cuts on Monday, construction machinery manufacturer Caterpillar (CAT, Fortune 500) announced 20,000 cuts. To top of page

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