Mass Layoffs Rising, New Report Shows

People wait to talk on an unemployment benefits hotline at an Employment Development Department office in San Jose, Calif. on Friday, Feb. 6, 2009.
AP Photo/Marcio Jose Sanchez
U.S. employers took a large ax to their payrolls in January, the government said Wednesday, and the cuts are likely to get worse over the next few months.

The Labor Department reported that mass layoffs, or job cuts of 50 or more by a single employer, increased to 2,227 in January, up almost 50 percent from the same month last year. More than 235,000 workers were fired as a result of last month's cuts.

January was a bad month for the labor market. Companies from a wide range of sectors announced thousands of layoffs, including Home Depot Inc., Boeing Co., Pfizer Inc. and Caterpillar Inc.

Not all of those cuts were reflected in the government's mass layoffs report, which counts actual firings as reported by laid-off workers seeking unemployment benefits. Many of the layoffs announced in January will take place over time, meaning that the department's mass layoff figures will likely keep increasing.

The pain has continued this week. On Monday alone, troubled flash memory maker Spansion Inc. said it will cut about 3,000 employees and computer chip maker Micron Technology Inc. announced it will slash as many as 2,000 workers by the end of August.

Still, the number of layoffs actually declined slightly from December on a seasonally adjusted basis, the department said. But the figures were uglier without the seasonal adjustment: mass layoffs jumped to 3,806, from 3,377 in December and 1,647 in January 2008.

President Barack Obama addressed the dire economic situation to Congress and the nation Tuesday, saying, "The impact of this recession is real, and it is everywhere." However, the president boldly declared: "We will rebuild, we will recover, and the United States of America will emerge stronger than before." (Read the full speech here |


The speech, which looked very much like a formal State-Of-The Union address, marked a transition from the hard fights of the president's first month in office to his attempt to sell legislators and the American people on a broad set of initiatives.

"Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down," the president said, stressing the importance of investments that will position the United States to compete on the world stage in the long run. (More On What Mr. Obama Said On The Economy)

The government seasonally adjusts many economic indicators to smooth out fluctuations resulting from weather changes, holidays and other predictable factors.

Eleven industries - including mining, manufacturing, transportation and financial services - in January reported the highest levels of job losses on government records dating back to 1996.

Additionally, sales of existing homes took an unexpected plunge from December to January, falling to the lowest level in nearly 12 years as pessimism about the economy grew and buyers waited to see how the new government would help revive the U.S. housing market.

The department said earlier this month that employers cut nearly 600,000 jobs in January, sending the unemployment rate to 7.6 percent, the highest in 17 years.

Mass layoffs rose sharply last year to more than 21,000, from about 15,000 in 2007, the department said in January. More than 2.1 million workers lost their jobs last year due to those reductions.