(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.
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.
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.”
Read more:
- Irvine Co.’s Bren loses $1 billion! Maybe.
- Irvine Co. lures homeshoppers with Apple laptop
- Irvine Co. No. 2 steps down
- Irvine Co. pays off its apartments’ public debts
- 40,000 acres of old Irvine Ranch gain state landmark status
- Irvine Co. joins the housing media fray
- Bren dodges financial disclosure
- Irvine Co. invests $1.4 billion in apartment joint venture
- O.C. builders’ sales woes hit ‘08 low
- Builders’ discounts average $22,900 in O.C.
