“We are working to achieve cost savings as part of efforts to improve our cost structure,” said Amgen spokesperson Kristen Davis.
This seemingly innocuous statement may trigger a cascading effect on the economic health of the Conejo Valley.
Amgen, the sprawling biotech company situated in Newbury Park, is one of the largest private employers in Thousand Oaks. Company layoffs have been announced, and the local campus may bear the brunt of the bulk of the 2,200 planned workforce reductions. The number of Ventura County employees slated to be laid off has not been officially revealed, but experts estimate hundreds of Amgen workers will lose their jobs.
“At this point, it is premature to say exactly what the impact will be on staffing levels at this site, but we do hope to minimize the number of staff impacted at the company through attrition and hiring freezes and, also, a voluntary transition program,” Davis said.
Meanwhile, down Highway 101 in Calabasas, mortgage giant Countrywide faces serious financial problems.
“When appropriate, Countrywide takes steps to adjust staffing levels, particularly in areas where the cost structure must align with production volumes,” Countrywide said in a statement Aug. 20. “Approximately 500 positions have been eliminated across the country.”
However, Countrywide, which, after Amgen, is Ventura County’s second-largest private employer, did not indicate how many jobs would be eliminated in the county.
“What will happen with Amgen and Countrywide is that there are going to be an awful lot of people who will have to sell their homes,” said Bill Watkins, the executive director of the University of California, Santa Barbara Economic Forecast Project. “Amgen people aren’t going to find another job locally, and Countrywide is still going to have trouble.”
Watkins said the residential real estate market is going to feel the pain.
“The home prices are going to face downward pressure,” he said. “The story on house prices has been buyers’ reluctance to purchase, and the reason home prices haven’t fallen is because sellers haven’t had a big incentive to sell their homes. They’re going to have more pressure than they had before, and so there will be downward pressure on houses.”
That view was echoed by Michael O’Connor, a loan officer for Pro Line Mortgage in Westlake Village.
“For every person that works at Amgen, there’s at least another business out there dependent on it,” he said. “And, of course, it’s a snowball effect. As Amgen goes, that will have an effect on prices, especially at [housing development] Dos Vientos. I think you’re going to see some localized deflation with real estate prices. Real estate, in itself, has a huge impact on the economy.”
Ventura financial planner and attorney Russ Charvonia has a number of clients who may be hurt by pending cutbacks. Charvonia said the local economy will be seriously affected by large layoffs.
“I expect it will hurt retailers and service people ranging from housekeepers to luxury car sellers because both Amgen and Countrywide workers are highly paid,” he said. “In addition, you had wealth that was created over the years with their employee stock options. With the prices of stocks down considerably, there’s not nearly as much wealth to be had from stock options.”
It will be difficult for workers to get new jobs in the same field, according to Charvonia.
“Your California hotbeds for biotech are the Bay Area and the San Diego area,” he said. “I think it will affect Ventura County, the Conejo Valley in particular.”
Government officials are not as pessimistic as the private sector experts.
“I know that between Amgen and Countrywide, the impact will ripple through the Thousand Oaks area, certainly,” Ventura County Supervisor Linda Parks, whose constituency includes residents of the Conejo Valley, said. “Fortunately, we are at a time now where the unemployment rate is at one of its lowest in a decade.”
Parks added, “I guess if you have to lose your position, you have a greater opportunity now to find another position because of the low unemployment rate. From a county perspective, our priority is trying to keep people from becoming unemployed through using our job and career centers. We offer training and try to place people, and that would be our priority.”
Thousand Oaks Mayor Andy Fox also released a statement about the impending layoffs.
“These reductions will touch many families in our community,” Fox’s statement said. “The city council, staff and our residents offer our compassion and support to all those affected.”
Thousand Oaks City Councilwoman Claudia Bill-de la Peña said the city has not officially reacted to the news.
“This particular issue has not been addressed by the city council,” she said.
Bill-de la Peña said she saw the real estate downturn coming.
“The residential real estate market is already showing signs of slowing down,” she said. “So it is to be expected that these particular layoffs will most definitely impact the housing market.”
And then there is the ripple effect of the layoffs, said Bill-de la Peña.
“Because the jobs being lost are high-paying jobs, you have to multiply each loss by at least two or three times simply because the average salary at Amgen is over $150,000,” she said.
Bill-de la Peña said the city council was ignoring this reality when it passed a budget last June. Bill-de a Peña was the lone dissenter.
“When I saw that we were dipping into our reserves to fund a lot of projects that were not crucial projects at all, I felt that it would be fiscally irresponsible of me to support the budget, and I voted against it,” she said.
“Out of $40 million, I believe we have about $300,000 left (in the city reserve),” Bill-de la Pena said. “The city, nonetheless, is still in OK financial shape. I believe that Thousand Oaks is able to weather the storm if we take precautions and the right steps.”
Local citizens are reluctant to go on the record with their opinions. However, they tend to see a different picture.
“Looking for a positive aspect to the layoffs, look no further than to those who live near or along the Amgen commute routes as it could mean as many as 800 less cars per day traveling the surface streets, including the already impacted Lynn Road,” one attorney from Lynn Ranch, who preferred not to give her name, said. “I really do feel bad for those who will be laid off.”
An employee of Amgen also refused to give her name, “because I don’t want to be laid off.” She said the projected impact may not be as large as expected.
“I think it’s overblown,” the anonymous employee said. “I don’t think it’s going to be that bad. There are a lot of science companies in the area, so I don’t think people would have a hard time getting another job.”
Economic forecaster Bill Watkins commented on the timing of the problems.
“Countrywide and Amgen are the two largest employers in Ventura County,” Watkins said. “Their problems are completely unrelated. Amgen’s is completely idiosyncratic. So there was a very low probability that the two things would happen at the same time. You sort of think of it as a double whammy on
“Combined with the housing slowdown and general uncertainty, it could be a challenge at times for Ventura County next year.”