Workplaces Under 50 People Held 43% of Private Jobs Before the 2020 Shock. They Made 53% of the Layoffs.

When the 2020 shutdowns hit, the layoffs did not land evenly. The small workplaces took more than their share of the cut — and the smallest of them made the most ground back by the end of the year.

The cut landed on the small workplaces

The Job Openings and Labor Turnover Survey counts layoffs by the size of the workplace, and it sets that size by the most people the workplace employed over the previous year. So a 30-person restaurant that cut to eight in April 2020 still counts as a 10-to-49 workplace — the shock does not shuffle anyone into a smaller band. On that footing, the spring of 2020 fell hardest on the small. Workplaces under 50 people held about 43% of private jobs in February and made 52.9% of the layoffs in March and April. The 10-to-49 band alone made 36.7% of them, more than any other. Above 250 employees, every band gave fewer layoffs than its share of jobs; the workplaces of 5,000 or more made 0.3%.

Workplaces with 10 to 49 people laid off about 22% of their February staff in eight weeks.

Ten to 49 employees was the hardest place to be

Measured against each band’s February employment, the spring layoffs ran to about 22% at workplaces of 10 to 49, about 19% under ten, and about 18% at 50 to 249. They fell off steeply after that: about 12% at 250 to 999, about 8% at 1,000 to 4,999 and about 2% at 5,000 or more. The very smallest workplaces were not the worst hit. The band just above them was.

The smallest made the most ground back

JOLTS cannot say whether a new hire is the same person who was let go — its hire count includes recalls without naming them. What it can show is how much more hiring each band did than usual. From May to December 2020, against the same months of 2019, workplaces under ten people hired 1,602 thousand more people than normal — about half of their 3,048 thousand extra layoffs in the spring. At 10 to 49 it was about a third. From 50 employees up it was about 15 in 100 or less. Quits fell in every band through 2020, which means less of the usual replacement hiring, so if anything this measure understates the rebuilding. Workplaces under 50 did more than three-quarters of all the extra hiring in the private sector that year.

What to do with this if you run a small business

The 2020 numbers make a hard point about small employers: when that shock arrived, the cut at small workplaces went deeper than their share of jobs — and they also rebuilt harder. The lesson is not to avoid the cut. It is to decide, before you ever need to, how you would make it and how you would come back from it: which roles you would protect, who you would call first when work returned, and how many weeks of payroll you could carry while you decided.

Four limits worth holding. JOLTS counts workplaces, not companies — a nine-person branch of a chain sits in the under-ten band. The size-class series are not seasonally adjusted, which is why every comparison here is to the same months of 2019. The Bureau notes that survey response is much lower in the larger size classes and that size-class estimates are not reviewed for outliers. And ‘extra hiring’ is a comparison to a normal year, not a count of people rehired.

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This article is for educational purposes and is not a substitute for professional financial or legal advice.