Layoffs Persist Despite Rosier Employment Data
Despite positive indicators from employment data, some of Minnesota's largest employers were forced to trim staff in 2010-and the economic downturn seems blind to industry lines.
State Economist Tom Stinson told Twin Cities Business in late December that the state has seen better-than-expected job growth in 2010-but “the hole of this recession is so deep” that it will take years to return payroll employment to pre-recession levels.
“In the process, there are going to be layoffs and hiring, and we're seeing more hiring-but that doesn't mean there won't be layoffs,” he said.
- In the technology sector, St. Paul-based Lawson Software, Inc., announced in June plans to eliminate 150 to 200 positions. The company said at the time that the cuts were “about getting the business sized to specific business metrics we need to achieve” based on demand. Most of the employees affected by the cuts were located in Europe.
The health care industry was also battered by the economic downturn, and three major players in the Twin Cities announced layoffs this year.
- In January, Medica cut 150 jobs, or about 10 percent of its workers. The Minnetonka-based health care insurer attributed the cuts to an effort to “manage administrative expenses.”
- Children's Hospitals and Clinics of Minnesota-which operates hospital campuses in Minneapolis and St. Paul-announced in August that it would cut between 200 and 250 jobs. The hospital said that it lost $43 million last year by treating patients who depend on Medicaid-and the decrease in revenue prompted the decision to significantly reduce its work force.
- Less than a month after the Children's announcement, North Memorial Medical Center in Robbinsdale shared similar news-the hospital would eliminate roughly 200 positions within the course of a few months. A hospital spokesman at the time told Twin Cities Business that it had informed employees of the “need to realign resources.” He said that most positions would be eliminated by “not filling open positions and reducing hours,” but he acknowledged that layoffs were also possible.
- Minneapolis-based Alliant Techsystems, Inc. (ATK), said in October that it had laid off 414 employees in Utah due in part to the phase-out of a national space shuttle program. The company also dismissed 12 workers in Florida and Alabama. And layoffs at ATK are nothing new-the company let 450 workers go in August 2009 and 500 more in October 2009.
- Following a legal battle with environmental groups, Plymouth-based The Mosaic Company in August laid off about 140 workers at its South Meade, Florida phosphate mine.
- Eden Prairie-based SurModics, Inc., in October announced plans to cut 13 percent of its work force, or slightly more than 30 employees.
- And the ad industry was not immune to staff reductions: In July, Minneapolis-based Campbell Mithun axed about 10 percent of its staff after losing three significant clients over the course of only three days.
Some companies based outside of Minnesota-but with significant operations in the state-also made cuts in 2010.
- San Francisco-based Wells Fargo announced in July a $185 million restructuring of its financial division-a move that led to the closing of 638 stores, including 13 in Minnesota. Of the roughly 3,800 jobs affected by the decision, between 65 and 91 were based in Minnesota.
- Thomson Reuters, headquartered in New York, last month said that it would restructure its Eagan operations, a move that resulted in the loss of 60 jobs. The Eagan campus, which employs approximately 6,600 people, said at the time, however, that it plans to add an unspecified number of customer-facing sales and marketing positions.
- In other news impacting Eagan, Lockheed Martin Corporation in April laid off 47 employees. And in mid-November, the Maryland-based company said that it will shutter its Eagan facility by 2013-a move that will affect roughly 1,000 jobs.
Despite the barrage of cuts throughout the state, there are positive indicators for Minnesota's economy. According to November data from the Minnesota Department of Employment and Economic Development, the state has added roughly 44,800 jobs during the past year, and its unemployment rate-hovering around 7 percent-is well below the national average of 9.8 percent.
Plus, some activities in the state may soon result in job increases. For example, planning documents indicate that Bloomington-based Polar Semiconductor, Inc., hopes to expand its manufacturing facility-a move that may bring 300 new jobs to Bloomington.
And a high-voltage transmission line network being built across Minnesota and the region is expected to generate thousands of jobs within the six-year time span during which construction will take place.
But, according to Stinson, large, “headline-grabbing” activities that involve significant one-time hires are not the key to recovery, but rather a few jobs being added here and there at a larger base of companies. “That is the kind of employment growth we expect to see in 2011 and late 2012,” he said.