Irvine Co. announces first layoffs in 16 years

September 19th, 2008, 4:12 pm · 20 Comments · posted by Jeff Collins

Irvine Co. headquarters in Newport Beach

(Updated to add links, photos, more details and background.)

The Irvine Co., the region’s preeminent land developer, announced today that it has laid off 100 employees due to the housing slump, the weak economy and two years of declining land sales, according to a company memo sent to its staff members.

The layoffs amount to nearly 3 percent of the land developer’s 3,800-person work force. It’s the first time since 1992 that the county’s top land owner has laid off workers.

A company spokesman said the firm is combining similar functions to reduce overhead.

The company had been conservative in filling vacant positions since the housing downturn began, the memo sent to employees said.

“The reality of declining land sales over the past two years dictates the current actions to ensure the Irvine Company remains strong as we work through the near-term challenges posed by the struggling economy,” the memo said.

A new arched entrance graces the approach to The Pelican Hill Resort under construction at Newport Coast Drive and Pelican Hill Road in Newport Beach. Jebb Harris/The Register.

Pelican Hill: A new arched entrance graces the approach to The Pelican Hill Resort under construction at Newport Coast Drive and Pelican Hill Road in Newport Beach. Jebb Harris/The Register.

The Orange County Tax Collector’s office lists the Irvine Co. as the top property taxpayer in the county. The original 93,000-acre Irvine Ranch, formed from several Spanish and Mexican land grants, occupied more than a fifth of Orange County.

For decades, the company has been transforming the ranch into master-planned housing developments, apartment and office buildings and shopping centers such as Fashion Island and the Irvine Spectrum Center.

It has diversified its portfolio by investing in commercial real estate in Silicon Valley, Los Angeles and San Diego, with about 400 office buildings, 35 retail centers, 80 apartment complexes, hotels, marinas and golf clubs.

Last October, it paid $1.4 billion for a 90 percent stake in a joint venture, along with now bankrupt Lehman Brothers, that had acquired apartment complexes owned by Archstone-Smith Trust.

Forbes magazine listed the company’s chairman and sole stockholder, Donald Bren, 76, as the nation’s 20th wealthiest American, with an estimated net worth of $12 billion.

During the late 1980s, the Irvine Co.’s staff shrank from 1,500 employees to less than 300. It later laid off about 100 employees in 1992, but hasn’t held layoffs since.

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“There’s no more painful action a company can take than to inform employees that their positions have been eliminated,” said John Christensen, a company vice president. “We’re saying good-bye to some very talented employees who have made important contributions to our company.”

During the housing boom, the Irvine Co. built out much of its newer developments in Irvine, Newport Coast, Crystal Cove and Shady Canyon. It also was in the final stages of winning local approvals for the remaining 18,000 home sites it plans to develop in Anaheim, East Orange and Irvine’s Northern Sphere.

This mid-day photograph shot during normal working hours shows no activity in the Serra development in Portola Springs. Daniel A. Anderson/The Register

LITTLE ACTIVITY: This mid-day photograph shot during normal working hours shows no activity in the Serra development in Portola Springs. Daniel A. Anderson/The Register

But development has since stalled in projects such as Portola Springs after the housing slump hit in late 2005.

New home sales in Orange County fell steadily since then, dropping from an average of 460 homes a month in 2005 to 100 a month this year. Home builders cut new construction here by 70 percent in the past two years and have stopped buying land for new projects.

Layoffs also have been rampant throughout the industry. Homebuilders have announced drastic staff cuts for more than a year, have combined geographic divisions and sold off ongoing or planned developments for as little as 40 cents on the dollar.

“Our operations … continue to be negatively impacted by dormant land sales to homebuilders,” Christensen said. “As a result, we are combining similar functions and reducing corporate overhead expenses.”

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Mulliganville says:

September 19, 2008 at 4 pm

Well, when the top dog loses $1,000,000,000 over a year, the results are going to trickle down.

Bogey says:

Unfortunately, these stories will be on the increase for some time. Bedroom communities can be hit the hardest.

Roach says:

How stupid is this.
Pay the “head hochos” less MONEY!
If people would stop saying the economy is bad,
then it wont be.
There are TOO MANY RICH PEOPLE and
too many poor.
If I had one wish, I’d wish to switch.
Every poor person would switch with a rich one.
Bada Bing………..next

lee in irvine says:

September 19, 2008 at 5 pm

How can Mr. Bren allow this to happen. Where is his civic responsibility. Are these unfortunate people, not part of the very same group, that he has profited handsomely from last 16 years?

I do agree with you Lee…it would be nice for one corporate executive to do the right thing and keep them on the payroll.

oc1958 says:

bren your cut and run lib

homeatlast says:

As one who was laid off on 06/30 by one of the largest auto insurance companies in the country, I sympathize with the people who will be laid off ~ there is no work out there for anyone who earned over $50,000 per year ~ the fat cats get fatter and the others have to go on the state payroll…..$450 per week unemployment is good but not great! Let’s hope we don’t see society photos of Bren handing over more charity checks to organizations while his (ex)employees scramble for left-overs…..

anthony says:

September 19, 2008 at 6 pm

its a terrible situation, next- they need to re-price all their rental apartment properties since they have been inflated through the last 6 years….. used to pay 1,850 for 2 bedroom at iac newport bluffs in 2001 now they are around 2,600…

UDeserveWhatUPutOut says:

I have no sympathy for those who have profited greatly at the expense of illegal and legal U.S. Citzens — they are vultures who deserve much more than this — and it IS payback time!

OC_Watch Dog says:

September 19, 2008 at 7 pm

Puleeeeease!

It’s about time Sir Donald takes a hit.

He is all about GREED! He should keep them all employed.

I am sick and tired of hearing about him raping the OC landscape. Doesn’t he heave enouh dough?

JERK!

Brian says:

September 19, 2008 at 8 pm

The Irvine Company is evil.

IR says:

Middle management and employees always take the brunt of the top. They get fired with a huge parachut attached to there contract. We get EDD and handouts or foodbanks.

Tracy says:

September 20, 2008 at 12 pm

Bren had to what was required. It’s a business. Heard many of the people Layed Off were unnecessary anyway.

Mark says:

I agree with Tracy. Sometimes this is a more polite way of saying “you suck at your job and we didn’t need you anyway”.

EH says:

September 20, 2008 at 6 pm

If people have a problem with being laid off and then want owners to give them their paycheck, why don’t the people with the problem start their own company with the money they have, make it huge and rich and when things go bad give everyone else their money. I think people should just start their own company or work for themselves instead of complaining. Sheesh

Dan says:

September 21, 2008 at 3 pm

Bren will still buy Lennar, despite his and his firm’s supposed troubles…

NationalBubble.com says:

September 22, 2008 at 6 am

this will put even more pressure on the housing market in the OC.
Another leg down is “in the bag”

Pat says:

September 23, 2008 at 2 pm

Think of what Orange County would be like without the Irvine Company and the vision that Donald Bren has had for the county. Everything they build is top notch. Maybe some of you would rather see 7-elevens and gas stations at every corner. He’s donated and conserved much more land than he has built on, and when he does build, it is something that will be nice to look at now and even decades down the road.

Move to Montana and make six dollars an hour if all you want to look at is open land.

Jonathan says:

September 30, 2008 at 8 am

For those that need it, About.com just added three new sites to their Top 10 Employment site list…

http://www.linkedin.com (professional networking)
http://www.indeed.com (aggregated listings)
http://www.realmatch.com (matches you to the perfect job)

There is a perfect job out there for everyone. Complete top 10 job site list here:
http://jobsearch.about.com/od/joblistings/tp/jobbanks.htm

jane do says:

November 7, 2008 at 3 pm

TIC is the best. I love my job especially the office manager.

Slice	Price	Ch.	Sold	Ch.
House	$495,000	+4%	1,841	+3%
Condo	$304,000	+3%	845	+8%
New	$500,000	+4%	150	-26%
All OC	$430,000	+2%	2,836	+2%

Orange County Register