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June 17, 2006
Delaware lost 2,100 jobs in May, due mainly to temporary layoffs of auto assembly workers.
And for the first time labor officials saw evidence of the effects of six months of layoffs by Bank of America. The credit card industry cut 400 jobs in May, mostly cutbacks resulting from Bank of America's $35 billion purchase of MBNA Corp. Jan. 1, according to Department of Labor statistics released Friday.
"They have actually been cutting a few hundred each month," said Ed Simon, senior director of labor market information at the state Department of Labor.
Simon said the layoffs following the sale will be more evident in the employment numbers as the severance packages of laid-off workers run out. People do not become eligible for unemployment insurance until their severance benefits expire.
Bank of America has provided few details about layoffs in Delaware. In April, bank officials said they would eliminate 630 jobs by closing MBNA's Dover credit card call center by the end of the year and 128 jobs by the end of June at MBNA's home mortgage operation at Milford Crossroads, near Newark. But the bank has eliminated an undetermined number of executive and other positions this year without any announcements.
State economic development officials have said they expect the total layoffs to be under 2,000 people. Analysts had earlier predicted 3,000 to 4,000 layoffs as a result of the acquisition. The company had announced it would lay off 6,000 nationally as a result of the acquisition.
Since May of 2005, the number of credit card jobs in Delaware has declined 9 percent to 14,500 from 16,000.
In addition to the credit card industry, a large proportion of the job losses in May came from temporary layoffs at DaimlerChrysler's Dodge Durango plant in Newark.
Sales of the sport utility vehicle have been falling each month this year, forcing the plant to shutter seven weeks. Higher fuel prices and increased competition from more fuel-efficient vehicles and other SUVs had Durango sales slide in May to 43 percent.
The unemployment rate in Delaware inched up to 3.8 percent in May compared with 3.7 a month earlier, but remained lower than the 4.1 percent rate a year ago last month. The state's unemployment rate is below the national rate of 4.6 percent.
Despite the May losses, Delaware's economy continues to see a net gain in employment this year. There were 4,800 jobs created between May of 2005 and last month.
"We may not be doing quite as poorly as we expected," said Mike Helmar, economist at Moody's Economy.com, a research and consulting firm in West Chester, Pa. "Earlier this year, we were talking about a very slight decline, now we are talking about a small increase."
Helmar said layoffs at Bank of America are not expected to be as steep as originally feared and that it should not have a negative impact on the economy long term.
Some businesses are seeing significant gains in employment compared with last year.
"We are seeing a lot of job orders in a number of different areas," said Jim Randall, president of Caldwell Staffing Services in Wilmington. "It's much better than last year."
Randall said there are certain jobs, including medical secretaries and administrative positions, where demand is outpacing the number of available workers. His business is up 25 to 50 percent from last year.
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