The headline-grabbing layoffs that began at mortgage lending companies more than a year ago radiated throughout the Los Angeles economy in the fourth quarter of 2008.
State figures show a steady stream of large-scale staff reductions at L.A.-area companies and facilities have reached into virtually every corner of the local economy.
Area manufacturing, health care, retail, transportation, high-tech and media companies all gave official notice to the state Employment Development Department that they were preparing mass layoffs. More than 5,800 workers either have gotten pink slips or will see them in the next several weeks as indicated by these filings.
Under the state law, any company with at least 75 full- or part-time employees that has a plant closing, layoff or relocation of 50 or more workers must notify the state 60 days in advance. A similar federal law covers companies with at least 100 full-time employees.
In all, 29 companies gave notice during the fourth quarter that they were laying off at least 50 employees for a cumulative total of 5,814. That compares with 33 companies laying off a cumulative 5,380 workers in the fourth quarter of 2007.
But the figures only portray a fraction of the job losses. Many more reductions have taken place at smaller companies that don't have to file notices with the state, while tens of thousands of independent contractors from mortgage brokers and real estate agents to day laborers are also going without work. That's why unemployment figures have climbed dramatically, out of proportion to the reported layoffs. In November 2008, state figures showed 435,000 people in L.A. County unemployed, a 72 percent jump from 252,000 in November 2007.
Nevertheless, the reported layoffs occurring in L.A. County in the fourth quarter of 2007 and continuing through 2008 provide a picture of the recession that's gripping the region, according to Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange.
"In Southern California, because of the subprime mortgage crisis and the early onset of the housing and construction slowdown, the recession actually began in mid-2007," Adibi said.
During the fourth quarter of 2007, about 20 percent of the reported layoffs in L.A. County were concentrated in the mortgage finance sector. A year later, the damage had spread to other sectors, most notably retail.
Indeed, topping the list of mass layoff notices last quarter was Hayward-based department store chain Mervyn's LLC. After its October bankruptcy liquidation filing, Mervyn's closed all 18 stores in L.A. County and in December filed notice with the state it was laying off 1,893 employees here.
Brick by brick
Next on the list was Castaic Brick, one of three brick-making operations owned by Los Angeles billionaire David Murdock's Castle & Cooke Inc. Castaic Brick gave notices to the state that it was laying off 342 workers. David Hollingsworth, president of Castle & Cooke's brick division, said a combination of factors led to the temporary shutdown of a Castaic facility in north L.A. County: seasonal maintenance work and a 20 percent slowdown in orders from its major retail customers, Home Depot Inc. and Lowe's Cos. Inc.
Not all the reported layoffs are due to the sputtering economy. At Activision Blizzard, which gave notice last quarter that it was laying off 113 employees, spokeswoman Maryanne Lataif said the cuts were the result of the company's merger agreement with the Blizzard Entertainment unit of Vivendi Entertainment.
Similarly, the layoff notices given by Glendale Memorial Hospital were not directly related to the economy. Spokeswoman Amy Stricker said the hospital had long planned to close two services: behavioral health and the women's clinic.
"We had found that the services were able to be accessed at other places in the community," Stricker said.
However, the decision to make the changes at this time was partially driven by cost and other economic factors.
Stricker added that the actual number of layoffs at Glendale Memorial was 122, significantly lower than the 176 layoffs filed with the state. The hospital was able to find other positions for many of these workers.
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