AUSTIN, Texas — According to a study by the Federal Reserve Bank of Dallas, Texas saw an increase in mass layoffs in 2023 and that could mean a rise in unemployment in the near future. 

Although jobless rates remained low, notices of pending workforce reductions filed with the state could signal a rise in unemployment and slowing employment growth in the coming months. 

The study used the federal Worker Adjustment and Retraining Notification Act (WARN) to calculate its data. WARN requires all employers, typically medium and large companies, to inform state officials when they plan to either close a facility or if they are planning to lay off many of their employees.

“The notices can signal the shutdown of a job site of at least 50 workers, a layoff of a third of a location’s workforce involving fewer than 500 workers or outright dismissal of more than 500 employees,” the study explained. 

While WARN notices only make up 2.2% of Texas layoffs, they can still be a good predictor of coming economic trends. 

Typically, WARN notifications occur within 60 days of an action, barring major events like a pandemic.

On average, the time between the notice of a layoff and the actual layoff is 63 days, but during the pandemic, the average notice to the state was eight days after layoffs. 

Also during the pandemic, there was an abrupt rise in WARN notices, but these notices dropped back down to below average levels in 2021 and continued to fall even further in 2022. 

But, WARN notices are back on the rise with a 51.7% increase through the first 10 months of 2023. 

The main industries that saw an increase in mass layoffs were what the study called “white-collar” jobs like management, professional services, finance and insurance and health care.

“White-collar workers are typically less exposed to the business cycle than blue-collar workers are, so it’s unusual to see mass layoffs concentrated in these occupational classifications. Notably, however, mass layoffs in 2023 remained at very low levels,” the study said. 

While Dallas-Fort Worth and Houston made up most of WARN layoffs last year, Austin had a greater number of mass dismissals compared to previous years. Austin accounted for 20% of WARN layoffs in 2023, up from their average of 5.7% in pre pandemic years. San Antonio also saw an increase from 5.5% to 13.9%. 

The study attributed this increase to “high-tech downsizing” after a “period of aggressive pandemic-era hiring,” in the tech industry. 

The study predicted that the unemployment rate in Texas will rise to around 4.2% and said that “slowing is expected in 2024 and small increases in the state unemployment rate would be consistent with these factors.”