The state Department of Labor said its Shared Work program helped save 3,280 jobs in New York last year.
The initiative is available to companies as an alternative to layoffs.
In Western New York labor department officials said 120 Shared Work plans were approved in 2012. A total of 2,160 workers participated, and an estimated 560 jobs across the area were retained.
State labor department officials cited Buffalo's Hard Manufacturing, a maker of hospital beds and cribs, as one participant in the program.
"It has provided us protection against total layoff and given us the ability to retain our workers. We are a UAW shop, and, due to the nature of our business, we need this flexibility. It is working very well for us and we are very pleased with the program, " said Norm Bitterman, manager of the Grider Street plant.
Rather than lay off a percentage of workers to cut costs, an employer can reduce the hours of workers while they collect partial unemployment insurance benefits to make up for the lost wages. The program allows workers to keep their health insurance, retirement, vacation pay, and other fringe benefits. The employer, in return, gets to keep the skilled and trained workers.
To apply for the Shared Work program, employers can call the state Department of Labor at (518) 457-5807.