Despite strong economy, layoffs in Arizona jump 90% during 2019

By most indications, the national economy and that of Arizona are in good shape, with Arizona now enjoying the third-fastest job growth in the nation.

Yet large layoff announcements spiked by 90% last year in Arizona, with Tucson and other places outside metro Phoenix feeling the pinch especially hard.

Larger employers last year issued 50 layoff announcements involving 5,915 jobs, nearly double the totals from 2018, according to an Arizona Republic analysis of WARN reports for the state.

WARN reports, or Worker Adjust

ment and Retraining Notifications, apply to most nongovernmental employers with 100 or more employees. They’re designed to alert workers, their families and local communities by providing 60 days of advance notice.

While those roughly 5,900 jobs represent a tiny slice of Arizona’s nonfarm workforce, which totals nearly 3.6 million people, the number of announcements and layoffs increased sharply last year. In 2018, there were 25 such announcements statewide involving 3,118 layoffs. In 2017, there were just eight reports involving 974 positions.

Layoffs are continuing at a brisk pace so far in 2020. Over the first half of January, three companies announced job losses totaling more than 1,000 positions, with the bulk of that coming from 843 layoffs at a Macy’s customer-service center in Tempe.

The Republic’s analysis excludes Arizona notices that focused on layoffs in other states, even as some Arizona workers were affected. Also, some employers indicated they would offer other positions to workers facing layoffs.

George Hammond, an economist at the University of Arizona in Tucson, said the layoff increases noted in the WARN reports haven’t shown up in a higher statewide jobless rate or in increased initial claims for unemployment benefits. Nor have they dimmed Arizona’s brisk pace of job creation generally.

“In a dynamic economy, there are always some firms that are laying off workers or closing, while other firms are hiring or starting up,” Hammond said in an email. “Keep in mind, firms increasing hiring or starting up are not required to report that information in the same way that layoffs are tracked.”

Hammond indicated he would be more concerned if rising layoff announcements coincided with a jump in unemployment-insurance claims.

“That will be the time to get more nervous,” he said.

One notable trend last year was the much larger impact of these layoff announcements outside the Phoenix area. Some 31% of the jobs lost in 2019 were in Tucson, which accounts for just 14% of statewide employment.

Another 20% of the layoffs were in Fort Huachuca, Sierra Vista, Kingman and other smaller cities as well as Kayenta, in far northeast Arizona, where 295 jobs were lost from the closing of a mine by Peabody Western Coal.

A relatively modest 49% of the job losses were in metro Phoenix, which comprises 71% of the state’s employment base.

The largest statewide layoff announcement involved 785 jobs in Tucson at Concentrix, a business-services company focused on customer engagement. That surpassed the 665 jobs lost with the closing of St. Luke’s Medical Center in Phoenix.

Six Albertsons and Safeway stores were closed or were in the process of closing last year, mostly in the East Valley, involving 400 jobs.

Private investment company Cerberus owns the Albertsons/Safeway chain. The company has been musing a possible sale of the grocery business as an initial public offering of stock. Closing certain stores is a possible way to shore up the company’s financial position to make a stock sale more appealing to investors.

The Albertson’s/Safeway group issued a statement indicating that decisions to close stores are standard practices and “unrelated to any other business activities.” The decisions are based on an evaluation of sales performance and other factors, and employees often are offered opportunities in nearby stores, the company said.

“In areas where we operate many stores, like Phoenix, the number of employees we offer to relocate to other stores is often quite high,” the company said.