Valley Region’s Layoff Numbers Begin to Mount

In past economic slumps, a broad economic base was an asset to the San Fernando Valley. Where other areas in the state and country suffered from massive job losses the Valley received some protection due to the diversity of its business mix. The current recession, however, has changed that. Not just concentrated in one or two industry sectors, every sector from Glendale to Camarillo has laid off employees in recent months, with more coming throughout the year. In the entertainment industry, cuts have been made at Warner Bros. Entertainment and in the television and entertainment divisions of The Walt Disney Co; in manufacturing, it is aluminum wheel maker Superior Industries International Inc., Fadal Machining Centers and Levlad Inc.; in finance, Bank of America in Simi Valley; in biotech, Amgen; in trucking and logistics, DHL Express and Roadway Express; in media, the Daily News; and in health care, Providence St. Joseph Medical Center and the Motion Picture and Television Fund hospital and long-term care facility in Woodland Hills. Jack Kyser, senior economist with the Los Angeles County Economic Development Corp., called the broad swath of layoffs unusual when put up against what has taken place in the past. “People ask, ‘What is the comparison?” Kyser said. “Is it the ’90s? Well no. Is it ’81-’82? Maybe. Some people go back into the ’70s.” The retail sector suffered losses primarily through the bankruptcies and store closures of major chains like Mervyn’s, Circuit City and Linens ‘n Things. In the Antelope Valley, hard hit by cutbacks in the aerospace industry when the Cold War drew to a close, retail job losses are the most visible. For the first half of 2008, the employment numbers showed a slight growth in the Palmdale and Lancaster areas. If those numbers were projected out through the end of the year, there would be an employment gain of 1 percent, said Mel Layne, executive director of the Greater Antelope Valley Economic Alliance. Layne, however, was cautious because the full numbers were unavailable. “That is not going to hold true,” Layne said. “The majority of people who were let go were in the last three months.” In the San Fernando Valley, a review of unemployment claims at the Economic Research Center at California State University, Northridge, showed that claims were reaching the same level – 30,000 a month – as during the recession in the year after the Sept. 11 terrorist attacks. The rise in claims started in 2007 and began to take off in August when the number went above 25,000, said center director Bill Roberts. Reductions in Force Staffing cuts range from the single digits, such as at Glendale-based headquarters of Nestle USA Inc., to the hundreds. Yahoo! Search Marketing in Burbank followed up the layoffs of more than 100 employees last year by axing another 160 this month. Lower demand by the Big Three automakers led Superior Industries to eliminate its manufacturing facility in Van Nuys at a cost of 290 jobs and $16.5 million in labor costs. The 199 positions at Warner Bros. Entertainment in Burbank is part of an overall 10 percent cut in staffing, with all departments being affected studio facilities, home entertainment, television production, animation and technical operations. Already suffering from a drop off in advertising revenue, media companies television, radio and print got hit a second time as ad budgets got slashed as the economy tanked. Clear Channel took out $400 million from its budget by reducing staffing at its stations, including eight in Los Angeles. Camarillo-based Salem Communications has taken the strategy of making cuts in areas where value is not being added at a quick pace. The Christian-oriented media company let go about 13 percent of its workforce, put a hold on matching employee 401(k) contributions, reduced capital and discretionary spending and made 5 percent across the board salary cuts, with some senior executives taking a 10 percent cut. “We have cut ourselves to a thin staffing level,” said Senior Vice President and CFO Evan Masyr. “There is not a whole lot more that we can do.” SolarWorld, a manufacturer of solar panels with a facility in Camarillo, terminated 50 employees but did not put the blame on the economy. The German-owned company last year opened a brand new plant in Oregon for its U.S. operations and moved its cell and wafer manufacturing out of Ventura County. SolarWorld will continue to make solar panels in Camarillo, where the company spent $30 million upgrading the facility. Some engineering and technical positions were shifted to the new plant but most workers from the cell and wafer lines had to be let go, said company spokeswoman Anne Schneider. “This is not a shock for them,” Schneider said. “It was a lot of what people expected.”