More than 700 state workers will leave Glendale and Burbank over the next two years as the State Compensation Insurance Fund consolidates its operations.
The department will relocate 512 jobs from the 25-story Unum building to offices in Fresno, Stockton and Santa Ana by September 2012, according to a statement issued by the agency.
By September of 2011, 207 jobs will shift from Burbank to Fresno and Redding, according to the agency.
The consolidations — which will also affect offices in the city of Commerce, San Diego, Oxnard and the Bay Area — should save nearly $200 million and "achieve our goal of greater efficiency and long-term operational stability," agency President and Chief Executive Tom Rowe said in a statement.
Based in San Francisco, the fund employs 7,400 people and provides workers' compensation insurance to businesses throughout the state. The Glendale and Burbank offices underwrite policies and process claims.
Spokeswoman Gina Simons said it is too early to say if any fund workers will remain here. She said the fund expects to be "leaner" after the transition because not all employees will move.
"We know that these changes are difficult and that some employees may not be able to relocate or haven't made any decisions yet," Simons said in an e-mail.
Simons said the fund is offering workers relocation and moving expenses and is also preparing video tours and information about the cities where offices will expand. For those workers who decline to move, the fund will provide job-seeking workshops, Simons said.
The State Compensation Insurance Fund occupies six floors of the Glendale building that towers over the intersection of Central Avenue and the Ventura 134 Highway. The building and also houses offices for the insurance firm Unum, Spanish-language media company Univision and several financial firms.
The fund leases two floors at 2400 West Empire Blvd. in Burbank.
A spokesman for CB Richard Ellis, which manages both properties, declined to comment. But the news comes as local vacancy rates for top-tier office space continue to grow.
In the third quarter of 2010, Glendale had a 23% vacancy rate in high-end office buildings, according to Grubb & Ellis Research Services. Burbank's vacancy rate is 19%, according to the firm.
"Certainly it is disappointing to lose that type of business and that number of employees from our community," said Philip Lanzafame, director of the city's Community Development & Housing Department. "I don't think this is an indication of Glendale's business environment. I think larger external forces are at play."
Burbank City Manager Mike Flad attributed the loss to the L.A. region losing out to less expensive areas of the state.
"While we never like to see jobs leaving Burbank, what is most disappointing is the fact that these jobs are leaving Southern California," he said.