The potential economic consequences of layoffs to affected employees

"The 1980sfor the mining industry can be characterized as the survival of the fittest. High interest rates, low commodity prices, foreign subsidized competition and decreasing ore grades have contributed to a streamlining of the domestic mining industry in the United States, leading to the shutdown of operations or large cutback of work forces. The purpose of this paper is to look at the impact of a layoff on the employees of what was once a major uranium producer in south central Wyoming, twenty months after the final layoff and mine shutdown. INTRODUCTIONDecember 19, 1985, was the date of the final of three successive layoffs over a two-month period, leading to the complete shutdown of Petrotomics Company, a subsidiary of Getty Minerals Company. The final shutdown was due to a combination of depressed U3O8 prices and the takeover of Getty Oil Company by Texaco in January 1984.The layoffs affected 104 employees and included mine personnel, mill personnel and staff. Both hourly and salary workers were involved. The operation was considered non-union, however, a few mill hourly employees were unionized. At the completion of the layoffs. only a handful of employees remained for administrative and miscellaneous functions.For Getty employees, the terms of the merger agreement provided a generous level of separation benefits. The terms that were insisted upon by Mr. Petersen, Chairman of the Board for Getty Oil, stipulated that employees receive one month of severance pay, for each full calendar year of employment up to a maximum of two year's pay. This was the forerunner of what is now commonly known as the ""tin parachute”. All but the union employees of Petrotomics received these separation benefits. Union employees were covered by their separate, less generous, contract.Much of the literature that has been published in recent months has centred around the effects of layoffs on remaining employees, or the psychological effects on the severed employee. This study will emphasize the economic impact and ramifications due to a layoff, using the Petrotomics employees as a case example."