Layoff warnings up despite falling jobless rate

North Georgia jobseekers at a job fair at Lanier Technical College in 2015. Warnings of job cuts have risen the past few years, even as the jobless rate has fallen. HYOSUB SHIN / HSHIN@AJC.COM

Credit: Hyosub Shin

caption arrowCaption
North Georgia jobseekers at a job fair at Lanier Technical College in 2015. Warnings of job cuts have risen the past few years, even as the jobless rate has fallen. HYOSUB SHIN / HSHIN@AJC.COM

Credit: Hyosub Shin

Credit: Hyosub Shin


2016’s largest layoff notices in Georgia

Under federal law, employers are supposed to give workers and state agencies a 60-day notice of major layoffs or plant closings. Here are the largest so far in the state, with the expected date of the job cut:

Reliant Transportation, Savannah, 720 employees, May 27, Facility closure*

WellStar Health System, Marietta, 521 employees, July 9, Layoff*

Concentrix Corp., Norcross, 454 employees, May 7, Facility closure

MARTA, Atlanta, 371 employees, March 25, Layoff

Road America Motor Club, Columbus, 285 employees, Feb. 12, Facility closure

Fibrant, Augusta, 285 employees, June 30, Facility closure

Delta Global Services, Atlanta, 275 employees, March 15, Contract cancellation

Aramark Educational Services, Carrollton, 234 employees, April 30, Layoff

Chartwells, Valdosta, 225 employees, April 29, Layoff

Caterpillar, Thomasville, 210 employees, March 8, Facility closure

* Reliant canceled its contract with a school district; WellStar shifted workers to an unrelated employer.

Source: Georgia Department of Economic Development

Annual layoff notices in Georgia

The number of layoffs projected in federal WARN notices has been on the rise, despite the falling unemployment rate in the state.

Year, Number of affected jobs

2016 6,824*

2015 10,683

2014 9,426

2013 7,881

2012 6,820

* Year-to-date

Source: Georgia Department of Economic Development

Even as the state’s jobless rate declines, companies continue to shut down or shed operations in moves that affect thousands of Georgia employees.

So far this year, more than 60 have filed notices with the Georgia Department of Economic Development about planned layoffs or closures of offices or plants.

The notices are a requirement of a 1988 federal law, the Worker Adjustment and Retraining Notification Act, or WARN Act, which requires companies to give employees and state officials 60 days’ notice, in most cases, of such moves.

The law is aimed at giving workers time to prepare and local governments time to set up aid programs for dislocated workers.

The pace of such layoff notices, which has been rising in recent years despite a stronger hiring outlook, is one more conflicting indicator about the economy after seven years of choppy recovery.

Likewise, despite recent stock market records, profits have been falling this year and sales have been weak at the nation’s largest companies, pushing some to cut jobs.

In Atlanta, electric utility Georgia Power, homebuilder PulteGroup, rent-to-own company Aaron’s, and insurance service Crawford & Co. have all recently said they are shedding employees.

EchoStar Technologies is one of the latest companies to file a notice warning of cuts in Georgia. The Colorado communications firm recently said it expects to shut down its metro Atlanta engineering office in October, eliminating 137 employees.

“After detailed financial analysis taking into account many factors, EchoStar management has made the difficult decision to close our Atlanta facility,” spokeswoman Sonya Modi said in an email. She said the company will provide employees with “various means of assistance … to help with the transition process.”

Georgia companies have filed notices to shed more than 6,800 employees this year, slightly less than the 7,000 job cuts announced through August last year.

The annual job cut total has risen steadily in recent years, from 6,820 in 2012 to 10,683 last year.

Positive measures

By other measures, Georgia’s job market has vastly improved. Unemployment is falling. Employers are adding tens of thousands of jobs. Pay is rising, at least modestly.

Georgia’ jobless rate dipped to 5 percent in July, less than half the peak during the Great Recession. The state will add 116,000 new jobs this year and 70,000 in metro Atlanta, projects Jeff Humphreys, director of economic forecasting at the University of Georgia.

“I don’t have a good explanation” for the rising job cuts listed in WARN notices, said Humphreys. “It’s a very healthy labor market right now.”

One possibility, he said, is that WARN notices reflect what’s going on with larger companies because the law is more likely to require them to report cuts. Big firms have been hit harder by weakness in overseas markets, he said.

Another possibility is a jump in merger deals that prompt companies to shed redundant jobs, he said.

Companies often lay off more or fewer people than projected in their WARN notices. Some file notices as the result of contracting out work; in those cases people keep working at the same location, but with a new employer.

Whatever the WARN notices say or don’t say about the economy, they’re aimed at a practical problem: giving workers time to find another job, and state and local agencies enough time to help them.

The Georgia Department of Economic Development says its policy is to dispatch a “Rapid Response” teams for job cuts of 25 or more to provide aid in partnership with other state and federal agencies and local employers who might need workers. Services include job fairs and other help with job searches and unemployment claims, and other education and training programs.

But Georgia cut its budget this year to $4 million for the federally-funded teams, from $10 million in recent years, and shifted more money and responsibility to 19 local offices that provide assistance to workers and companies. Of the $4 million — all federal dollars — half goes into an emergency fund. The rest pays for four full-time staff members and additional support for the 19 local offices.

Exceptions skew list

Critics of the WARN Act say it has several exceptions that allow companies to skip giving notice of layoffs, such as when a business is failing, is hit by a natural disaster, or faces “unforeseeable circumstances.”

Companies also don’t have to file such notices if they cut jobs by offering voluntary buyouts.

Georgia Power, for instance, is cutting about 270 jobs this year through buyouts. PulteGroup, Crawford & Co. and Aaron's also recently said they're cutting jobs. Only Crawford & Co. filed a WARN notice, for 21 jobs in Atlanta.

In the largest job notice so far this year in Georgia, Reliant Transportation said it was cutting 720 people after leaving a year early from a troubled contract with the Savannah-Chatham school district to run its school bus operation.

In the largest WARN notice in metro Atlanta, Marietta-based WellStar Health Systems said it planned to lay off 521 employees in July.

However, the hospital operator said it was shifting the employees to another firm.

“We didn’t fire anybody,” said Tyler Pearson, spokesman for WellStar, a non-profit operator of 11 hospitals, mostly around metro Atlanta.

The 500-plus former WellStar billing and clerical employees “were transitioned to another employer,” said Pearson. “There’s no change really for them. They’re like contractors.”