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Thursday, Mar 28, 2024

Amgen Layoffs Had Little Economic Impact Locally

When Amgen announced Aug. 16 that it planned to cut up to 14 percent of its workforce, disaster was predicted. The layoffs at Amgen, as well as at Countrywide, would result in a mass exodus from the Conejo Valley, some declared. Local businesses would lose patronage, declared others. The forecast end result? Economic catastrophe. As it turns out, that’s not at all what happened. “Fortunately, the projected negative impacts by many outside of Amgen and outside city hall did not come to fruition,” said Gary Wartik, manager of Economic Development for the City of Thousand Oaks, where Amgen is based. Echoing Wartik is Mark Schniepp, director of the Santa Barbara-based California Economic Forecast. The organization produces economic forecasts for every county in California. “I told you so!” Schniepp said of his prediction that the Amgen layoffs would not have an overwhelmingly negative impact on the region. “We’ve never had the dire outlook. We thought it would be relatively contained. Everyone who got laid off or took the buyout has stayed in the area. There has been no noticeable surge in home listings It really has become a non-event, something you would talk about at cocktail parties in the Conejo Valley. You can’t really see it much in the economy.” Moreover, Amgen laid off only a little more than half of the 2,600 people it originally announced it would be cutting in August only 1,350 actually departed. That decision was made following the Centers for Medicare and Medicaid Services’ decision to limit how it would reimburse doctors for prescribing Amgen’s anemia drugs Aranesp and Epogen. Through attrition, a hiring freeze and a voluntary transition program, fewer employees were affected by the company’s restructuring, according to spokeswoman Sarah Rockwell. Once the company announced that it would implement a reduction in force, approximately 700 employees decided to participate in Amgen’s voluntary transition program, Rockwell said. Upon their departure, those employees received 24 weeks pay as severance and health coverage through 2008. Even employees who were forced to depart were given a lifeline of sorts via health coverage that will continue through Oct. 2008 as well as 26 weeks pay, including a base amount, according to Rockwell. In addition, she continued, those employees will receive two weeks pay for every year of service. And that’s not all. “We have contracted with a leading consulting firm to help with transition services, so that includes a career transition program ,and they hold workshops to help the transition of the affected staff,” Rockwell said. As part of the program, a job bank is maintained. Wartik, who consulted with Amgen representatives before the layoffs were officially announced, praised the company for its handling of the restructuring. “Amgen as a corporation has been very, very cooperative and helpful to these employees,” he said. Despite Amgen’s efforts, Wartik and Schniepp do have some anxieties about the employees who were let go. “Clearly those who lost their jobs face challenges in replacing them, and we’re very concerned about them and their families, and, having said that, one of the things we’re doing is working with people who have left Amgen to help in any way that we are able to help create new companies and looking at, in concert with the industry itself, creating a life sciences-biotechnology incubator,” Wartik said. The City of Thousand Oaks is working with those who left Amgen either voluntarily or by force to create and identify opportunities that would allow them to remain in the community. “They have families. They have houses. They have buying power,” Wartik said. In the pursuit of discovering opportunities for the staff Amgen cut, an event called the Southern California Biotech Ventures Summit was held just before Thanksgiving, Wartik said. While the community is working to identify job opportunities, Schniepp said that there has been no job growth in the area as of late. “But we certainly can’t attribute that to Amgen,” he said. Instead, lack of job growth “is really a product of the drag in overall state and national economy.” Preliminarily, at least, it doesn’t appear that more Amgen staffers will enter the ranks of the unemployed in 2008. Asked if there will be more rounds of layoffs, Rockwell answered, “There’s no plans to do anything further. We announced the program in August, and that’s been completed.” However, Rockwell was a bit cryptic when discussing what Amgen has in store for the future. “We’re a strong company with solid financials, an innovative pipeline and a dedicated workforce,” she stated. “These will be critical elements for moving the company forward in 2008.”

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