Some OC Sectors See An Increase in Layoffs During the Summer Months

Orange County job market continued to see layoffs through the summer. Real estate and aerospace were among two of the industries to see a surge in layoffs in July and August, according to data from JLL. Real estate in particular saw a 60% increase layoffs during these two months.

“While 70% of the real estate layoffs were recorded in July and August, the effective date of these layoffs were in May,” Jared Dienstag, research manager at JLL, tells GlobeSt.com. “Majority of the real estate layoffs have stemmed from a company that owns several asset types including hotels and retail properties of which have been the hardest hit industries during this economic downturn. Real estate layoffs only account for 6 percent of total layoffs.” Most of these layoffs have come from companies with significant exposure to the retail and hospitality industries. According to Dienstag, they make up half of the layoffs in the sector.

While these two industries saw a surge, no other industry saw a significant increase in lost jobs. Overall, job losses are actually declining. “Layoffs overall have dramatically declined month-over-month since March. Based on layoffs submitted to California’s WARN department, there were over 37,000 Orange County layoffs in March, followed by 22,000 in April, nearly 5,800 in May, 1,100 in June, 1,000 in July, 600 in August, and over 600 layoffs planned for September through December, however this last number is likely to increase as more layoffs are submitted during the final four months of the year,” says Dienstag.

Luckily for the office market, the layoff activity has yet to have a significant impact. “Since the onset of COVID-19 in mid-March, companies occupying office space have recorded fewer layoffs than retail, industrial, and hotel tenants. Of the total office layoffs, 38 percent were from dentists, which have largely returned to work,” says Dienstag. “Traditional office occupiers only account for 10 percent of total Orange County layoffs. During quarantine, most office companies have been able to stem the tide with working from home programs, which has helped to limit the number of layoffs. With that said, majority of tenants plan to return to the office. Leasing activity is down and available sublease space is on the rise creating negative net absorption, however, more occupiers are actively touring office spaces as they look to accommodate their employees and optimize their business.”

Future layoffs will depend on the pandemic and increase spread of the virus. “If we can avoid another spike in COVID-19 cases, then monthly layoffs are likely to remain well below the levels our economy witnessed in the spring. August layoffs declined 98% compared to March and 39 percent from July,” says Dienstag. “If COVID-19 becomes more under control, then a greater number of businesses can resume normal operations and provide a safe work environment for employees and customers. As this path becomes clearer, then the recovery can be more sustainable.”