Maker of Computer Parts to Lay Off 375

About 375 employees of a Thousand Oaks manufacturing plant were stunned Thursday when company officials told them their jobs will be phased out over the next seven months.

The job losses at Practical Peripherals, a maker of computer modems owned by Georgia-based Hayes Microcomputer Products, represent one of the manufacturing sector’s largest layoffs in recent county history outside the defense industry, analysts said.

The words “restructuring,” “consolidation” and “competitive position” did nothing to lighten the somber mood of the employees, who listened quietly to the news during an afternoon gathering in the plant’s parking lot.

After the announcement, which was made in English and Spanish to address the firm’s many Latino workers, those on the afternoon shift were asked to return to the assembly line.

“I just went through the same thing a year ago at Cardkey Systems in Simi Valley,” said Thomas Mohundro of Thousand Oaks, a 37-year-old father of two. Mohundro has only been at the company for three months, and he fears that the severance package promised to longtime employees will not mean much for him.

“It’s hard,” he said. “It looked good when I started.”

The gradual layoffs will begin Nov. 15, and each employee will be given two months notice before his or her termination date, said Robert Peltola, the company’s vice president of manufacturing and manager of the Thousand Oaks plant.

After the downsizing is completed in March, only about 30 engineers, developers and administrators will remain at the facility.

Company officials said the decision to consolidate manufacturing at its Norcross, Ga., headquarters was necessary in the face of an increasingly competitive market.

“The computer industry is undergoing a period of intensifying global competition, where speed to market and low cost of production are more important than ever,” said Dennis Hayes, chairman of the privately held company, which manufactures modems and other computer peripherals. “Nowhere is this new reality more acutely felt than in the analog modem business.”

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Hayes, which acquired Practical Peripherals in 1989, has navigated troubled waters in recent years. It filed a Chapter 11 bankruptcy petition in November 1994. At the time, nearly 500 employees worked in the Thousand Oaks plant.

Since emerging from Chapter 11 this year, the company has achieved gains in revenues and operating profits, officials said.

It decided to streamline its manufacturing operations to maintain that momentum, said Joe Fermichelli, a former top manufacturing executive at IBM PC Co. who was brought in as Hayes’ chief executive officer four months ago.

Fermichelli vowed that the firm would work with local government agencies to help laid-off employees find new jobs.

With the closing of the facility, the company expects to take a one-time restructuring charge of $6.5 million. Afterward, Hayes expects to save $5 million to $6 million annually in manufacturing costs.

The layoffs are a blow to the local economy, which could lead to housing vacancies and fractionally reduce overall consumer spending, said economist Mark Schniepp, director of the UC Santa Barbara Economic Forecast Project.

“You don’t hear that kind of layoff number every day,” he said. “This is big news in Ventura County. . . . This is a very big blow because we are in the midst of an economic recovery.”

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While jarring, the layoffs at the county’s 40th-largest employer are not entirely unexpected, he added.

“It has been the case that California tends to be a higher-cost state to do business in,” Schniepp said. “The move to Georgia is not unique, not surprising, because it’s a lower-cost environment to operate in.”

After returning to work, employees said there had been rumors that changes were coming. But the massive layoffs shocked many.

“I am kind of surprised,” said Sabina Lupanow, who has been an assembly line supervisor for nearly 2 1/2 years.

She listened to the layoff announcement, tightly clasping the hand of her husband, who also works at the plant. When they finish work on the late shift at 11:30 p.m., the couple must drive nearly 1 1/2 hours to their home in Valencia.

“Many people are really worried,” Lupanow said. “I have experience at several companies, but for a lot of people here it’s going to be very difficult to find a job.”

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For 49-year-old Maria Sandoval, the news couldn’t have come at a worse time. Sandoval has two children in Oxnard, three more she supports in Mexico and a husband who has been disabled for nearly a year.

“I worry about being able to support my family,” she said.

“I’m not so young anymore. Companies usually want to hire young people. I think God will help me.”

Correspondent Kate Folmar contributed to this story.