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# Economic Analysis of South Dakota Layoffs
South Dakota has experienced 140 WARN (Worker Adjustment and Retraining Notification) Act notices affecting 9,587 workers since 2007, establishing a documented layoff baseline for a state often characterized as economically stable. The median notice per year stands at roughly five to six, though this masks significant volatility. The state has witnessed two distinct surge periods: a sharp spike during the 2008-2009 financial crisis (12 notices, 1,068 workers) and a more recent wave beginning in 2020, when 11 notices were filed displacing 1,060 workers. The data suggests South Dakota's economy, while generally resilient compared to national trends, remains vulnerable to sectoral disruptions in finance, technology, and light manufacturing—industries that punch above their weight in employment relative to the state's population. The geographic concentration of layoffs in Sioux Falls (27 notices, 3,007 workers) indicates that the state's economic vulnerability is not evenly distributed but rather concentrated in its largest metropolitan area.
The composition of South Dakota's layoff activity reveals fundamental shifts within the state's industrial structure. Finance & Insurance leads by affected workers, with six notices displacing 572 workers, a pattern driven substantially by the presence of major financial services operations. Wells Fargo, which filed four separate WARN notices affecting 288 workers, exemplifies the vulnerability of the state's banking sector to national consolidation and digital transformation. The repeated notices suggest ongoing workforce optimization rather than a single discrete event, indicating that financial institutions view South Dakota's operations as subject to ongoing headcount rationalization—a pattern consistent with the broader industry trend toward automation and centralization of back-office functions.
Information & Technology generates nine notices across only 314 workers, indicating that tech layoffs, while frequent, tend to be smaller in scale than financial sector reductions. The presence of government technology contracts in the state (notably the KBR contract at the EROS Data Center filing three notices with zero workers displaced, suggesting administrative or planned separations) shows that even specialized tech employment remains subject to federal budget cycles and contractor consolidation.
The second-largest industry driving layoffs is Healthcare, with seven notices displacing 320 workers. Avantara, a senior living and healthcare services operator, filed three notices for 98 workers. This pattern reflects broader healthcare industry pressures: labor cost management in long-term care, staffing model reorganization, and competitive margin compression. The fact that healthcare layoffs remain modest relative to the industry's size in South Dakota suggests that the sector is managing workforce reductions through attrition and reorganization rather than wholesale facility closures, though this may mask underlying instability in specific segments like long-term care.
Manufacturing, despite its historical importance to South Dakota, generates only two notices affecting 56 workers—a striking disproportion that suggests either that manufacturing operations have already right-sized or that major disruptions occur infrequently but are enormous when they do occur. Molded Fiber Glass Companies filed five combined notices (across two parent entities) affecting 1,009 workers, making this a dominant single-sector employer. The company manufactures composite materials and fiberglass products, a capital-intensive business vulnerable to commodity price fluctuations, transportation costs, and demand from construction and automotive sectors. The repeated notices suggest persistent challenges in demand or operational efficiency rather than a one-time restructuring.
Professional Services shows three notices affecting 475 workers, with Banner Engineering (a manufacturing automation firm) accounting for three notices and 475 workers. This reflects the vulnerability of specialized service providers to technology displacement and customer consolidation. Similarly, Accommodation & Food shows three notices affecting 482 workers, predominantly from Aramark (two notices, 511 workers), which operates food service and facilities management contracts—work highly exposed to labor cost pressures and client spending fluctuations.
The data indicates that South Dakota's economy lacks deep diversification in high-wage, stable employment sectors. The state's largest layoff concentrations cluster in cyclical industries (finance, manufacturing, hospitality services) and contract-dependent operations (government technology contracts, facility management), all of which are structurally vulnerable to consolidation, automation, and external economic shocks.
Sioux Falls accounts for 27 of South Dakota's 140 WARN notices—nearly one-fifth of all notices—with 3,007 displaced workers, representing 31 percent of all workers affected statewide. This concentration far exceeds what would be expected given the city's population share of the state, indicating that Sioux Falls functions as South Dakota's economic core in a way that generates disproportionate vulnerability to localized shocks.
Aberdeen, the second-affected city, filed 11 notices affecting 2,140 workers. The scale of Aberdeen's layoffs relative to its population indicates that one or two large employers dominate the local economy, creating severe concentration risk. Investigation of the data suggests that manufacturing operations in Aberdeen (likely including Molded Fiber Glass facilities) are a significant component of this figure. When a single employer or industry comprises such a large share of a regional economy, even routine workforce optimization can create substantial local disruption.
Rapid City filed 10 notices affecting 821 workers, positioning it as the third-affected region. The Black Hills region's economy depends on tourism, government employment, and specialized manufacturing, making it vulnerable to hospitality downturns and federal budget cycles.
Smaller communities show marked vulnerability to single large employers. Spearfish (3 notices, 435 workers), Yankton (2 notices, 313 workers), and Watertown (2 notices, 396 workers) all experienced layoffs affecting hundreds of workers despite being smaller markets. These figures suggest that South Dakota's small and mid-sized cities often host large facilities of national or regional employers, creating employment concentration that generates outsized economic impact when those facilities downsize.
The geographic data underscores a critical policy vulnerability: South Dakota lacks sufficient labor market diversification at the regional level. Workforce displacement in Sioux Falls affects the state capital's economy directly, but displacement in Aberdeen or Spearfish can devastate entire local communities with limited capacity for workers to relocate or transition between industries.
Wells Fargo (4 notices, 288 workers) represents the finance sector's repeated optimization efforts. The staggered notice filings suggest that the bank is conducting ongoing headcount management rather than responding to a single crisis, consistent with the industry-wide trend toward technology automation and centralization of operations away from regional hubs.
Molded Fiber Glass (combined five notices, 1,009 workers) emerges as South Dakota's single largest layoff story. The company manufactures fiberglass-reinforced plastic products for industrial and construction applications. The scale and frequency of these notices indicates persistent operational challenges—whether from demand softness, cost pressures, or manufacturing consolidation. A company filing five WARN notices over the analysis period is not simply adjusting margins; it is fundamentally restructuring its workforce footprint.
Capital One (2 notices, 750 workers) shows significant financial sector consolidation. Capital One's presence in South Dakota reflects the state's role as a financial services hub, but the large single displacement event indicates that even substantial financial operations can be subject to rapid downsizing based on corporate strategy shifts.
Aramark (2 notices, 511 workers) represents the contract services model's fragility. Aramark operates food service and facilities management for institutional clients across the state; workforce reductions suggest either that clients are reducing operations or that Aramark is rationalizing service delivery models to reduce labor costs.
Eros (2 notices, 400 workers), which appears to be the same organization as the KBR-operated EROS Data Center in Aberdeen, shows the vulnerability of government contract operations. Federal budget cycles, contract recompetition, and policy changes can generate large and sudden workforce adjustments in this sector.
The employer concentration is striking: the top 10 employers account for roughly 3,500 of the 9,587 displaced workers, representing approximately 36 percent of all layoffs. This concentration indicates that South Dakota's documented layoff activity is not diffuse labor market churn but rather the outcome of decisions at a small number of large firms. When Molded Fiber Glass or Capital One downsizes, state-level impacts are immediate and substantial.
South Dakota's layoff history follows recognizable business cycle patterns with additional sectoral volatility. The 2007-2009 period shows clear financial crisis impact: 2008-2009 combined produced 12 notices affecting 1,068 workers, establishing a crisis baseline. The subsequent years (2010-2017) show relative stability, with notices declining to one to three per year and affected worker counts remaining in the low hundreds, suggesting that the state's economy absorbed the crisis and returned to equilibrium.
However, 2020 marks a significant pivot, with 11 notices filed affecting 1,060 workers—matching the entire 2008-2009 crisis volume in a single year. This surge reflects the pandemic's labor market disruption, particularly in hospitality, services, and contract operations. Notably, the surge does not abate: 2022 and 2023 each generated six notices affecting 715 and 622 workers respectively, and 2024-2025 continued elevated notice filing at seven and eight notices affecting 701 and 414 workers.
This recent pattern differs from the post-2008 recovery in a crucial way: South Dakota has not returned to pre-2020 notice frequency levels. The data suggests either that businesses are now more prone to filing WARN notices for smaller displacements, or that the underlying volatility in the state's employment base has increased. Given that notice frequency remains elevated while per-notice worker displacement has declined (the 2024-2025 average of 557 workers per notice is below the historical median), the most likely explanation is that the state's major employers have become more sensitive to workforce reductions and more inclined to formalize them through the WARN process.
The trajectory from 2020 onward suggests that South Dakota is experiencing not a temporary pandemic shock but a shift toward greater labor market volatility. This may reflect broader business cycles, but it may also indicate structural change in the state's major industries—particularly the vulnerability of financial services to automation and the ongoing optimization of manufacturing operations.
South Dakota's economy rests on a narrow sectoral foundation. The state's largest employment concentrations include agriculture (which appears as only one WARN notice affecting 225 workers, suggesting that agricultural employment changes occur through different mechanisms than manufacturing or services), financial services, healthcare, tourism, and light manufacturing. This base provides stability in normal times but generates vulnerability to sectoral shocks.
The prominence of Finance & Insurance in both employment and layoffs reflects South Dakota's role as a credit card processing and financial services hub, driven by favorable regulatory treatment and the presence of major institutions like Wells Fargo and Capital One. These companies employ thousands of South Dakotans in data processing, customer service, and back-office operations. The repeated WARN filings from financial institutions indicate that this sector's employment base is shrinking relative to output—a direct result of automation and the digitization of banking services. As credit card processing, loan origination, and customer service become increasingly automated, the justification for maintaining large call centers and processing facilities in South Dakota diminishes.
The state's manufacturing base, while smaller than historical levels, remains important. The presence of Molded Fiber Glass, Terex Load King (construction equipment), and various smaller manufacturers indicates ongoing industrial capacity. However, the large and repeated layoffs from Molded Fiber Glass suggest that the state's manufacturing operations compete in price-sensitive, commodity-like industries vulnerable to cost pressures and cyclical demand.
Tourism and hospitality employment, significant in Black Hills communities and through operations like Wyndham Hotel Group (2 notices, 241 workers), remain vulnerable to discretionary spending fluctuations and, as 2020 demonstrated, sudden demand shocks.
South Dakota's economy benefits from a low unemployment rate (historically below the national average) and steady growth in professional services sectors. However, this stability masks vulnerability in the sectors that provide the highest absolute employment levels.
The data suggests that South Dakota workers and policymakers should anticipate three key developments. First, continued volatility in financial services employment is likely. The automation of banking operations will continue, and Wells Fargo, Capital One, and similar firms will likely file additional WARN notices as they optimize headcount further. Workers in data processing, customer service, and back-office operations should anticipate that their roles face above-average displacement risk compared to other occupations.
Second, manufacturing operations remain under structural pressure. Companies like Molded Fiber Glass must compete globally on cost, and ongoing productivity improvements and automation are reducing headcount requirements even in industries that remain active in South Dakota. The state is unlikely to see significant manufacturing employment growth, and further consolidation among regional manufacturers is probable.
Third, the state's labor market concentration in specific communities creates vulnerability to localized economic disruption. Aberdeen and Spearfish lack sufficient economic diversification to absorb major employer disruptions without significant social impact. Regional economic development strategies should prioritize diversification in these communities.
For policymakers, the data indicates a need for workforce development programs targeted at sectors experiencing the most disruption (finance, manufacturing, professional services) and geographic areas showing the highest concentration of layoffs. The elevated notice frequency in 2020-2025 suggests that labor market volatility is not declining and that proactive workforce planning and retraining programs are warranted. South Dakota's historically low unemployment rate and favorable economic indicators should not obscure the reality that certain sectors and communities are experiencing persistent and substantial workforce displacement.
