WARN Act Layoffs in Pikes Peak/Teller, Colorado

Analysis: Layoffs in Pikes Peak/Teller, Colorado

# Economic Analysis: Layoffs in Pikes Peak/Teller, Colorado

Overview: Scale and Significance of Workforce Disruption

Between 2015 and 2022, the Pikes Peak/Teller region experienced substantial labor market disruption through 27 WARN notices affecting 2,697 workers. This represents a significant displacement event for a metropolitan area, particularly when concentrated within specific years and employer clusters. To contextualize this impact: the average notice displaced roughly 100 workers, though this masks considerable variation between major corporate reductions and smaller sectoral shifts.

The concentration of notices in the 2015–2016 period—accounting for 23 of the 27 total notices—suggests the region absorbed most of its documented displacement during this two-year window. This clustering is analytically significant because simultaneous layoffs across multiple sectors compress the local labor market's absorption capacity, making reemployment more difficult and potentially extending unemployment duration for affected workers. The subsequent drop to only four notices in 2022 indicates either improved economic conditions or a shift in how companies structured workforce reductions (potentially through attrition rather than formal layoffs requiring WARN notices).

Aerospace and Defense Dominance: The Engine of Displacement

The Pikes Peak/Teller layoff landscape is overwhelmingly shaped by aerospace and defense contractors, a pattern consistent with the region's historical economic development around Fort Carson and Colorado Springs' concentration of military-adjacent industries. Lockheed Martin Corporation and Honeywell, two of the nation's largest defense contractors, together account for 7 of 27 notices and 834 workers—roughly 31 percent of all documented displacement.

Lockheed Martin filed four separate WARN notices affecting 375 workers across the period analyzed. This multi-notice pattern suggests the company pursued episodic workforce reductions rather than a single catastrophic event, potentially indicating contract completion cycles or shifting defense spending priorities. Similarly, Honeywell generated three notices affecting 459 workers, making it the single employer with the highest documented displacement in absolute terms. The company's three separate reduction events suggest structural challenges within specific divisions or operational units rather than a wholesale facility closure.

Beyond these two anchors, Xerox, General Dynamics, and Jacobs Technology Inc - ETASS Group collectively represent additional aerospace and defense-adjacent employment losses totaling 238 workers across three notices. These companies share common characteristics: federal procurement dependency, cyclical contract-driven business models, and sensitivity to defense budget fluctuations. The concentration of such firms within Pikes Peak/Teller reflects the region's historical specialization and creates structural economic vulnerability when federal defense spending contracts or consolidates.

The aerospace and defense sector's dominance creates a notable economic risk profile. Unlike diversified metropolitan areas with robust private-sector service and technology ecosystems, Pikes Peak/Teller's reliance on federal procurement means regional employment is substantially buffered from commercial market forces but acutely sensitive to Congressional spending decisions, Pentagon reorganizations, and strategic weapons platform decisions made in Washington. The 2015–2016 notice concentration may reflect responses to post-sequestration defense budget uncertainty or specific contract lifecycle events.

Unexpected Complexity: Technology and Retail Disruption

While defense contracting drives absolute worker displacement, the composition of layoff notices reveals unexpected economic diversification and vulnerability in non-traditional sectors. Kira, a technology company, generated a single notice affecting 364 workers—the second-largest displacement event in the dataset despite coming from a single notice event. This outsized impact suggests either rapid growth followed by contraction or a facility closure at a concentrated location.

Xerox contributed an additional 328 workers through a single notice, blending its defense contracts with broader technology and office equipment operations. Target generated 241 workers of displacement through retail sector reductions. Together, these three firms—representing technology, retail, and diversified corporate services—account for 933 workers or 35 percent of all displacement, fundamentally complicating any narrative that frames Pikes Peak/Teller as a purely defense-dependent economy.

The technology sector, represented by Kira, XIO Technologies, VMware, and StarTek, collectively affects 608 workers across four notices. This represents meaningful information economy employment in the region, though the data cannot determine whether these represent true technology sector establishments or support functions for defense contractors. The presence of retail (Target) and healthcare (Integrated Health Services) layoffs further confirms Pikes Peak/Teller hosts genuinely diversified employment, even if defense contracting dominates among large-scale displacement events.

Industry Patterns and Structural Forces

The industry breakdown provided identifies only three sectors with explicit categorization: Information & Technology (3 notices, 222 workers), Retail (1 notice, 241 workers), and Healthcare (1 notice, 144 workers). However, this taxonomy substantially undercounts the aerospace and defense sector, which is absent from the enumerated breakdown despite representing roughly 31 percent of all workers affected. This classification gap likely reflects how WARN notices document establishment-level sector coding rather than parent company primary industry, meaning Lockheed Martin and Honeywell facilities may be categorized under their primary corporate sector rather than defense.

The concentration of displacement among large employers suggests Pikes Peak/Teller's employment base includes substantial numbers of workers concentrated in single establishments, creating lumpy labor market outcomes. When a 375-worker reduction occurs (as with Lockheed Martin), the regional economy cannot smoothly absorb such displacement—unemployment spikes, training infrastructure becomes overwhelmed, and local consumer spending drops proportionally.

The peculiar case of Sinton Dairy Foods Company/Borden merits mention: four notices are filed affecting zero workers, suggesting either data entry errors, withdrawn notices, or voluntary disclosures without actual layoffs. This anomaly doesn't materially affect the analysis but raises questions about WARN notice accuracy and completeness.

Historical Trajectory: Concentration in 2015–2016

The temporal distribution of notices reveals critical patterns about regional economic conditions. Thirteen notices (48 percent) occurred in 2015, followed by ten notices (37 percent) in 2016. This two-year period absorbed 23 of 27 notices, concentrating workforce disruption in a compressed timeframe. The subsequent four notices appearing in 2022 represent an 85 percent decline in notice frequency compared to the 2015–2016 average, though the small sample size limits inference about emerging trends.

The 2015–2016 clustering likely reflects multiple simultaneous pressures: post-sequestration defense budget uncertainty, technology sector revaluations following the 2015 high-growth period, and broader macroeconomic adjustments. The fact that only four notices emerge in the subsequent six years (2017–2022) suggests either improved economic stability, changing workforce reduction practices, or data reporting gaps. Companies increasingly execute workforce reductions through attrition, performance management, and early retirement incentives rather than formal mass layoffs, potentially explaining the decline in WARN notices without indicating improved actual employment conditions.

Local Economic Impact: Employment, Retraining, and Community Effects

The displacement of 2,697 workers in a metropolitan area the size of Colorado Springs carries substantial immediate and lasting consequences. Assuming Pikes Peak/Teller's labor force approximates 450,000 workers (a reasonable estimate for the metro area), these 2,697 displaced workers represent 0.6 percent of the total workforce, a seemingly modest figure that masks acute localized impacts.

The temporal concentration means that in 2015 alone, roughly 0.35 percent of the regional workforce received WARN notices, a significant shock concentrated within months rather than distributed across years. For affected occupational cohorts—particularly skilled manufacturing, defense engineering, and technology positions—the local supply of unemployed workers with specialized credentials dramatically increased, depressing wages for remaining positions and extending jobsearch duration. A laid-off defense systems engineer cannot easily transition to retail management or healthcare administration, meaning displacement creates persistent occupational mismatch.

The geographic and corporate concentration of displacement creates concentrated community impacts in specific neighborhoods or corridors where displaced workers cluster. Communities near Lockheed Martin or Honeywell facilities experience elevated unemployment, reduced property tax revenues, and declining consumer spending long after official layoff dates pass. Secondary effects ripple through local service economies: restaurants, automotive services, and retail establishments near major employer sites experience demand contraction.

For workers in declining sectors, retraining represents a critical adaptation pathway. The presence of technology sector displacement (Kira, Xerox, XIO Technologies) alongside healthcare opportunity (only one documented healthcare layoff) suggests potential pathway for occupational transition. However, retraining effectiveness depends on wage replacement—many displaced workers in aerospace and defense earn $60,000–$90,000 annually, while healthcare and retail positions often start at substantially lower wage levels, making occupational transition economically painful even when technically feasible.

Regional Context and Comparative Position

Pikes Peak/Teller's layoff experience reflects both its specialization and the broader Colorado economy's structural vulnerabilities. Colorado's defense-dependent corridors (Colorado Springs, Grand Junction) share similar displacement patterns driven by federal procurement cycles. However, Colorado's diversified economy in Denver, Boulder, and Fort Collins provides some buffer against regional aerospace shocks—a nationwide downturn in defense contracting affects Colorado Springs acutely while the state's broader technology and energy sectors may move countercyclically.

The Pikes Peak/Teller region's 27 notices and 2,697 workers displaced places it as a significant but not catastrophic layoff center within Colorado. The state's major metros experience larger absolute displacement but often with greater economic diversification providing absorption capacity. The concentration of Pikes Peak/Teller's displacement among defense contractors makes it proportionally more vulnerable to federal policy shifts than Colorado's overall economy.

The 2015–2016 concentration timing aligns with national patterns following sequestration-era defense budget constraints, suggesting Pikes Peak/Teller experiences amplified sensitivity to federal fiscal policy. When Washington implements spending reductions affecting defense procurement, Colorado Springs employment contracts faster and more sharply than metros with diversified private-sector economies.

The data reflecting workforce displacement concludes in 2022, making current assessment difficult. If 2017–2022 truly represents improved conditions rather than data gaps, the region may have stabilized following the 2015–2016 disruption. However, the absence of recent notices provides no information about current labor market conditions, emerging layoff announcements, or whether companies are executing workforce reductions through non-WARN mechanisms.

For policymakers and economic development professionals in Pikes Peak/Teller, the data underscores both the region's aerospace and defense strengths and its consequent vulnerability. Diversification initiatives reducing reliance on federal procurement cycles remain strategically important, as do workforce development investments enabling rapid occupational transitions when major employers contract. The 2015–2016 experience demonstrates that even economically substantial regions absorb workforce disruption through measurable unemployment and community stress when displacement concentrates temporally and sectorally.