Southern California home builders Standard Pacific Corp. and Ryland Group Inc. expect to lay off about 10% of their newly combined workforce after the companies' $5.2-billion merger closed Thursday.
The new firm, CalAtlantic Group Inc., will lay off the workers in the coming months because of overlapping staff in nine divisions, said spokeswoman Danielle Tocco. CalAtlantic will have corporate headquarters in Irvine and northern Virginia, while Ryland's Westlake Village headquarters will close.
Standard Pacific in Irvine and Ryland in Westlake Village together had 2,752 employees at the end of 2014, according to Securities and Exchange Commission documents, meaning a 10% reduction could result in nearly 280 layoffs. Tocco was unable to provide an updated employee count and said that the company is still deciding where the layoffs will occur.
CalAtlantic has operations in 17 states, including California.
In announcing the merger's closure, CalAtlantic said it was now the nation's fourth-largest U.S. home builder and would have had revenue of $5.2 billion in the 12 months that ended June 30. By joining forces, it said it could save $50 million to $70 million annually in production, purchasing and other costs.
The companies announced their plans to combine in June. At the time, they said that together they would have a wider reach and more diverse product offerings, allowing them to better capitalize on the housing recovery.
Ryland, for example, built mostly lower-priced homes in states such as California, Georgia, Pennsylvania, New Jersey and Texas. Standard focused on upscale houses in California, Texas, Florida and the Carolinas.
On the first day of trading, CalAtlantic shares opened Thursday at $40.46, and closed up 70 cents, or 1.7%, to $41.16, on the New York Stock Exchange.
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