Modem Firm to Cut About 375 Workers

About 375 employees of a Thousand Oaks manufacturing plant were stunned this week when company executives told them their jobs will be phased out in 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 outside the defense industry in recent county history, analysts said.

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 executives said the decision to consolidate manufacturing at its Norcross, Ga., headquarters is necessary in an increasingly competitive market.

Hayes, which acquired Practical Peripherals in 1989, has navigated troubled waters in recent years. It filed a Chapter 11 bankruptcy petition in November 1994.

Since emerging from Chapter 11 this year, the company has achieved gains in revenue and operating profit, executives 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 four months ago.

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 Ventura County economy and one that could lead to housing vacancies and cuts in consumer spending, said economist Mark Schniepp, director of the UC Santa Barbara Economic Forecast Project.

Correspondent Kate Folmar contributed to this report.