Recession infects tech; job cuts add up
Job cuts are hitting the Tri-Counties’ technology sector, with more than 365 positions shed in recent months.
The list of afflicted firms includes some homegrown success stories such as Goleta’s Citrix Online, a Web collaboration software firm, and Clipper Windpower, the Carpinteria-based maker of some of the world’s largest wind energy turbines.
Also cutting back are big players in the region’s manufacturing base, such as Moorpark-based Special Devices, which is in Chapter 11 bankruptcy proceedings, and Zebra Technologies Corp., an Illinois-based printer maker that employs about 600 at a Camarillo plant and is moving production to China.
The contracting companies point to slumping global demand, still-frozen credit markets and locked-down capital budgets that make it tough for their customers to pay for products.
The cuts come as California’s unemployment rate reached nearly 11 percent in February. Ventura County fared the worst at 9.2 percent, with Santa Barbara County slightly better off at 8.3 percent and San Luis Obispo County doing best at 8.1 percent.
Here’s a closer look at the most recent round of layoffs in the Tri-Counties.
In January, Citrix Online’s parent company, Citrix Systems, said it would slash its global workforce of 5,000 by 500 positions.
Laura McCormick, vice president of strategic communications at Citrix Online, confirmed that the companywide cuts hit Goleta but would not provide an exact number of positions eliminated. Citrix Online has more than 500 employees in Goleta, and affected workers were offered a severance package and health-care assistance, McCormick said.
“It was part of a broad plan to streamline across the operation, including the online division,” McCormick said. “With the technology sector really dependent on capital spending, it’s very important that we position ourselves for long-term growth. It was a very painful last resort for the company.”
Citrix Online’s revenue grew 22 percent in 2008, even as the parent firm predicts an overall decline in revenue of about 9 percent for the first quarter of this year.
McCormick stressed that she sees the online division as in good shape because its flagship products – GoToMyPC, GoToMeeting and GoToWebinar – are aimed at cutting travel expenses. “That’s obviously important in any business climate, but especially in a challenging one like this one,” McCormick said.
Clipper Windpower cut 90 positions from its global workforce of 840, which includes its Carpinteria headquarters and more than 300 workers at its Cedar Rapids, Iowa, manufacturing and assembly plant. The company is trimming production this year.
Clipper spokeswoman Mary Gates said the credit crunch has hit the company hard because it’s been tough for customers to finance big projects.
“Specifically, a number of Clipper’s customers deferred delivery of wind turbines from 2009 to future years due to their inability to access tax equity and project debt financing,” Gates said in an e-mail to the Business Times. “At the same time, these customers were impacted by the overall uncertainty of the world’s economic situation, which has slowed business and reduced investment in new activities, at least for the short-term.”
But Gates said Clipper has a bright outlook for the wind energy industry in light of President Obama’s call to require that 25 percent of America’s energy come from renewable sources by 2025 and the recently passed stimulus package.
“Obama administration has stated its intention to double the production of renewable energy in the next three years,” Gates said.
Moorpark pyrotechnics maker Special Devices, which makes explosives to trigger automobile airbags, said it’s laying off 117 workers in Moorpark between now and the end of April, cutting its local staff by about one third.
Chief Financial Officer Harry Rector told the Business Times the move is part of a consolidation of the firm’s automotive division and a new focus on its aerospace and defense businesses.
“It’s just driven by the economy,” Rector said, noting that automotive sales have plummeted and that automotive operations would be consolidated into Special Devices’ Mesa, Ariz., facility. “We’re not shifting away from [automotive products] as much as adjusting to the realities of where the business is right now,”
The company will try to transfer workers into its defense and aerospace divisions, Rector said. “The problem is that even though defense and aerospace is growing, it’s just not as large as the automotive business.”
Special Devices filed for Chapter 11 bankruptcy protection in December, and Rector is confident the company will emerge stronger. “We’ve tried to keep the best of the best,” Rector said. “When [the economy] turns, we’ll have a really good base to keep going.”
Zebra Technologies Corp.
Zebra Technologies, an Illinois-based firm that makes barcode and card printers, said last year that it’s moving production to China and has started the transition. It employs 600 at its Camarillo plant and is cutting 44 jobs in April, said Marty Holtzman, director of human resources at Camarillo.
“This actually has nothing to do with [the ailing economy],” Holtzman said. “We’re actually behind the curve in the industry – we’re the only ones left that makes these kind of things onshore.”
He said the move to China will happen over the next two years. Those cut were floor production workers, he said, and they’re being offered a severance package, health-care assistance and training to help find a new job.
“We are bending over backwards to help these people. A lot of these are long-term people who worked really hard,” Holtzman said.
Celestica, a Canadian electronics firm, said it will close its Oxnard facility in April. The facility performed LCD display repairs. The location employed 81 people.
Jim Fitzpatrick, corporate communications director for the firm, said the decision was due to a range of factors over Celestica’s 35 locations worldwide and not a problem in Oxnard.
“It’s really demand across our whole network: What are the current things that our customers are looking for from us?” Fitzpatrick said. “The site has been a great performing site. Obviously this is very unfortunate, and we’re hoping we can do everything we can to give work placement counseling to get our employees back on the employment side as soon as possible.”
Hollingsead International, a Ventura-based avionics tray maker for the aerospace industry, said it will lay off 35 people. The company didn’t respond to repeated requests for an interview about the cuts.
Recent job reductions aren’t limited to the Tri-Counties’ technology sector.
On March 18, Pacific Capital Bancorp, the largest local banking company in the Tri-Counties and parent of Santa Barbara Bank & Trust, said it will cut 300 jobs across its operations by mid-year.
Farmers Services, part of Los Angeles-based Farmers Insurance, told state regulators it plans to lay off 82 people at its Simi Valley location.
And Workrite Uniform, a fire-resistant clothing maker, told Ventura County officials that it will lay off 75 people, according to published reports. The company employed about 415 according to the most recent data from the University of California, Santa Barbara, Economic Forecast project, but it didn’t respond to requests for more information about the cuts.