The LATimes has finally broken the MSM silence. This blog and others have been warning about this for a very long time. Now that EN is but a shadow of its former self I hope all the remaining readers are either old enough or smart enough to read the ten foot tall letters spray painted on the side of the Conejo Valley.
Although plans have not been finalized, the company is expected to announce it is reducing its workforce by as much as 15% in the next several weeks, according to three people familiar with the matter.
The company, however, says layoff talk is premature.
"We have made no announcements regarding staff reductions," Amgen spokesman David Polk said.
Amgen has already delayed plans for a new $1-billion plant in Ireland and has slowed manufacturing operations elsewhere. Many contractors and temporary workers have left the company in recent months and employee overtime has been curtailed, those familiar with the matter say.
Mark Shoenenbaum, a biotech analyst at Bear Stearns Cos., said that if pressure on Amgen continued to mount, it might have few choices but to cut expenses further. "There's likely fat in places they can find," he said.
Last week, Chief Executive Kevin Sharer left a general message to employees on the company's voicemail system indicating there may be upcoming changes. Some workers said privately that they considered the message ominous.
Anonymous postings by nervous Amgen employees on websites such as http://www.cafepharma.com and http://www.medzilla.com are filled with workers searching for clues. One message left July 30 said, "Does anyone have more recent information regarding the departments that will be impacted by the layoffs? I know it has started and it is a scary time to be at Amgen."
Anyone who's seen this before care to handle any questions from people who haven't lived long enough to have experience with this type of corporate denial? Short answer: Amgen is moving to Longmont, Colorado.
47 comments:
First in a quiet way.
S'okay FMW. You can dance nekkid on the the tables if you wish. In fact I think there are few lurkers that... oh never mind. You know what I mean. Thousand Oaks, home to Amgen and Calabasas home to Countrywide and combined more than 20% of the non-government employment in a county of 810,000 people. If I weren't extremely comfortable living here I'd be shorting this place ASAP. There is no exit strategy for what may be coming. Amgen has been hiring a scientist a day every day for a decade. We are talking $200k salary employees. Countrywide, Mozillo made $2.2 million exercising options yesterday. Yesterday. The only prhase that come to mind is "cold turkey."
rob,
what is it you do again and how much will the affect you?
Rob -
Amgen has a campus in South San Francisco, they're growing that place quite a bit. It is a small campus now, but rapidly expanding. I know they're still hiring in quite a few departments in the Bay Area.
They're hiring more in Colorado, I think you are dead on predicting the move.
I have been laid off twice and both times we had a clue it was comming weeks in advanced. The only reason I did not think I was going to get the axe was because my bosses and VP's all said how valuble we where and that it was not going to happen.
My advice, Bosses and VP's lie! They will tell you to your face your job is safe up until the minute they let you go. NEVER believe them, they know if they tell the truth in advance they will have people jumping ship, fucking up stuff on purpose, stealing, and slacking off. It's best they keep you in dark until they drop the hammer, and that is what they do.
If you think pink slips are around the corner then they are, at least for some people they are. Rumors and gut feelings like that spread and persist because it is true.
My advice, its common knowledge that the best time to look for work is while you have a job. I would start looking if I where in that situation where you think the pink slips are comming because they probably are.
Even if you get to keep your job working for a company that is issueing layoffs sucks. The guys they keep get to work harder, thier raises and benifits get pushed off and they expect you to give 110% because you special enough to be kept aboard.
Aaron,
Thanks for your concern. I own a small computer services company. The effect directly will be small but a general economic gut shot will slow the region and there's no escaping that. Normally I'd be ready to say there will be investment opportunities but some of those scientists hired 10 years ago have $150k mortgages and they'll rent their homes out positive cash flow so even if there are "bargains" in real estate they won't be good investments.
The County government will be hit so hard they won't know what to do.
If you think pink slips are around the corner then they are, at least for some people they are. Rumors and gut feelings like that spread and persist because it is true.
Yep. Last company I worked for, a .bomb that was once a successful financial software company, went through 10(!) rounds of layoffs before I got wacked in July 2001. Each time the chainsaw comes around you bleed a little bit even if you don't get cut. Survivor was big then, we joked about getting voted off the island. But unlike the people in the mortgage biz getting laid off, we all received nice severance packages.
Dawg, glad you're in a good position. For many others in your neck of the woods it will be nuclear winter. I can understand why companies are leaving.
What happens when Countrywide layoffs of more?
Also, how many people does Murdoch employ in WLV? He has a significant presence here in Bako with his massive real estate company. I am hearing they are staring layoffs.
@rogersmith8080, I completely agree. Having worked for a number of companies that were bought, sold, re-orged, gutted, offshored, etc., I’ve never understood people who sit around waiting for the pink slip. When there are signs of trouble, I update my resume and start looking ASAP and, thankfully, have always managed to avoid sinking with the ship.
The old EN is back. It is so "comfortable" to be engaged with those who decided to stick around. Thanks.
California is so screwed. A survey last year said something like a third of families with kids were considering leaving the state. Taxes are crushing, services are crappy, infrastructure is crumbling, liberals are pandering, socialism rampant. A typical middle class person in the San Fernando Valley is paying 28% Fed, 15.2% FICA, 9.3% CA and 0.8% unemployment insurance. Yup over 50% and then when they shop 8.25% sales taxes. That is unless you are trying to buy gasoline. Then it is worse.
A typicle middle class person shouldn't be paying 15.2% FICA unless they are self-employed. And those fed and state tax rates look like supplemental income rates.
Larger point remains though - the weather in this state no longer makes up for all the negatives that are accumulating. Most likely, my family and I will pull up stakes and head east in the next five years.
Did a little more research, and Fidelity's money market funds vary in their exposure to CFC, depending on the fund, but it's only in the range of 1%-3% of total fund assets. Still, if they have CFC notes on the books, that in and of itself is a worrisome sign. Money market funds are in the business of providing short-term liquidity--under normal conditions their returns and risks are both equally low, but these aren't normal times.
I would be surprised to see any kind of significant losses in a money market fund, but they're still something short of a perfectly safe haven at the moment.
Otis, Otis, Otis. You fell for the oldest trick in the book. Yes, every single person formally employed pays 15.2%. Just because half that charge doesn't show up on your pay stub doesn't mean you aren't paying it.
You have 8.25% sales tax *and* a state income tax? WTF.
PV,
Yeah, my 5 digit parked money isn't CFC exposed but it is mortgage funder exposed. CFC isn't the only mortgage market place Fidelity is misallocating my cash. Still at par and I'm getting ready to re-allocate (still witihin Fidelity) before "unusual conditions" preclude asset transfers "temporarialy." We apologize if this causes any inconvienience.
Dawg, you'll have to explain it to me slowly, cause as far as I know, I pay 7.65% in my looser W-2 job and my employer matches it.
Otis. Think about it. You don't even pay the 7.65% by that perspective. Your employer keeps that 7.65% and sends it to SocSec just like the other "matching" contribution. You cost your employer $1000 and he or she ships $152 to the Social Security Administration right off the top. Or if you prefer you earned $1072 but only $1000 showed up in your account.
On-topic, with respect to layoffs, seen it first-hand, as I (barely!) survived five-odd rounds of layoffs at my last company. The reduction in contractors and consultants is definitely a clear sign of what's next. And the rumors are right more often than not.
My unsolicited advice for avoiding a layoff:
- Face time with your manager, and a lot of it. Telecommuters and travel-heavy positions (e.g. marketing) were the first to go at my previous job.
- Do something critical that the company needs. The graphic designer got cut, the guy who was the only person who knew how to maintain the mainframes didn't.
- Try to get onto projects critical to the company. The reason I survived is that my manager had successfully negotiated for our small group to be attached to the project that the company was banking on for future sales.
- Work hard. My manager used to say that the way to avoid layoffs was to make yourself indispensable to the company.
- Keep the resume current and always be looking for work. Even if you never switch jobs, you'll have a better idea of what's out there, and will be able to move faster on outside opportunities if you get the axe.
At 12:05 PM, Ogg the Caveman said...
You have 8.25% sales tax *and* a state income tax? WTF.
Ogg not from California. Ogg not know big problems bad cave tax and bad raider legistature tribe make for us dirt digging regular troglodytes.
California charges anywhere from a minimum of 7.25% sales tax (rare) to as much as 8.6% (also rare) on most everything. 7.75% is probably the mean and median. But wait, that's not all. That sales tax applies to things like State and Federal gasoline excise taxes. Yes, taxes on taxes.
Damned if I know where the money goes.
PV,
Great advice. I'd only add that if you do leave, don't do to them what they were going to do to you. Talk to your manager, tell him why and offer to do whatever to make the transition as smooth as possible. Your leaving gives him more flexibility to protect himself and your coworkers. And he is most likely in the same line for the "showers." You'll make a friend who might be your boss again next month or he might be your most grateful trusted worker in two.
Amgen layoffs would rule. I live in Simi and work in Newbury Park, and it seems like every single person at Amgen gets off work and on the roads in Thousand Oaks at 5:30. A 13 mile commute in the burbs shouldn't take 30+ minutes.
@Rob Dawg,
Do *you* pay over 50% of your income in taxes? I certainly don't.
Up here, state sales tax is 6.5% and the actual figure varies from the high 7s to the high 8s depending on where you are. There is no state income tax.
What would really blow your mind is that WSDOT actually seems to be pretty popular with the voters.
AIG, the world's largest insurer, said total delinquencies in its $25.9 billion mortgage insurance portfolio were 2.5 percent, but it did not give year-ago figures.
It said 10.8 percent of subprime mortgages and 4.6 percent in the category with credit scores just above subprime were 60 days overdue.
"Problems in July have gone beyond the subprime market," said Bill Bergman, an analyst with Morningstar. "Maybe not AIG, but some of these lenders have been whistling in the dark."
http://biz.yahoo.com/rb/070809/aig_subprime.html?.v=8&.pf='family-home'
It never was just subprime. They only said that to break the news incrementally.
Lets hope Amgen moves COMPLETELY out of CA. That will have a nice effect on housing prices.
We all remember the last RE crash in CA and for years and I mean YEARS there were news stories about companies moving out of CA.
Even 200k is not a decent salary in CA when a McMansion costs 1.5 million. 800k for a 40 year old crapshack w/lead paint and asbestos.
Amgen may not shut down completely in CA since they have a huge campus in TO but most new expansion will have to be out of CA if they cant hire the smartest people anymore due to high housing costs.
Thier industry lives and dies on hiring the very brightest genuises (and losts of them) to make blockbuster drugs that actually work. Its not a buncha kids pushing paper around like countrywide.
Yeah, my 5 digit parked money isn't CFC exposed but it is mortgage funder exposed. CFC isn't the only mortgage market place Fidelity is misallocating my cash.
I think the "safe haven" Fidelity Cash Reserves Fund that I also have my money parked in has more toxic swill besides CFC. I plan to look at this very closely tonight.
Black Friday tomorrow? I've never bought into that "plunge protection team" conspiracy nonsense.
10% is a crazy high number for delinquencies. At what level does the AAA tranche on the MBSs start? I'm under the vague impression that it's around 85%, so 10% wouldn't be cutting into it, but it definitely means that the B tranche is getting killed, and the "equity" tranche isn't worth the paper it's printed on.
But it's the nearly 5% rate on the mid-tier borrowers that must be sending deep shivers through the markets. The loans and the bonds for the higher rated mortgages are heavily leveraged, and any kind of losses there will be dramatically amplified.
And we're not even at the peak of the ARM reset curve, if I recall correctly--I think that will hit later in the fall.
I scoff at your 6-8% sales tax - I pay 10.75%, PLUS state tax. You guys are wusses.
I guess spending the money to be the major sponsor for the Tour of California cycling race hasn't paid dividends nor been the best way to spend money.
So what looks good to SHORT in your opinion folks?
Interesting things to ponder post-market today:
- The Dow cratered -384 points today, a roughly 3% drop. Market volatilty is out of control recently.
- They are making a TV series of the Geico Cavemen! Scary and funny at the same time. Heck, you can download the preair first episode already.
Well, there's plenty of empty houses at lower prices around Longmont( the Boulder facility has a spanking new car park too... )
Nice area - rather cold ( they keep telling me its a DRY cold, as if that somehow mitigates things ) in winter though.
There's even a Baja Fresh about 10 miles south of Longmont - and lots of real ale/micro-brews in the area - as well as being biking mecca and all.
Its not the end of world if you have to move here - just having real countryside around you 2 minutes away mitigates the lack of cosmopolitanness - its very very white here - and I don't mean the snow - o yeah I forgot to mention snow, skiing and other winter sports.
Did I mention the air is pretty clean ? I almost sound as if I like it - and I do - if only it wasn't so cold in winter.
-K
They are making a TV series of the Geico Cavemen! Scary and funny at the same time. Heck, you can download the preair first episode already.
I can't believe that phony gets so much airplay. I bet he doesn't even make his own tools.
@ratlab
It's not mere sponsorship. It's evaluation of their EPO products in the highly competitive, highly doped cycling environment. Kinda like how GM sponsors race teams so they can evaluate engines, except that GM is using legal gasoline.
@ sk:
Nice area - rather cold ( they keep telling me its a DRY cold, as if that somehow mitigates things ) in winter though.
It does matter. I'm not from there exactly, but having experienced both I'll take 10 degrees and dry over 32 and raining any day. The latter is much more miserable and harder to protect against.
> HauspocalypseNow said...
>
> New expansion will have to be out of CA
> if they cant hire the smartest people anymore
> due to high housing costs.
Only true for college hires. Most of the "best and brightest" in US Bio-tech are already here in CA (or in Mass). Most do not want to pull kids out of school, move, etc. Specialized industries like bio-tech tend to cluster.
Why do computer firms go to the silicon valley? Because that's where the tech types are. Same idea.
My wife is a bio-tech patent attorney (not for Amgen). We're quite happy living in the Bay Area, despite the high housing prices - we're already in. Would not even consider moving for a job. Thankfully, she is quite happy where she is and has several options with companies around here should she become unhappy.
Around here, most movement in the bio-tech industry is simply job jumping betwen the major players in the area (Genetech, Amgen, PDL... all have a good Bay Area presence).
Going to suck for all the Amgen types if they leave the LA area. San Diego has some shops, but not nearly enough...
@PropertyFlopper,
good points. I'm sure they have to do lots of college hiring since bio is a growing field and they can only poach so many people from other firms.
one reason it will take years for RE to tank in CA is the people 'already in' with super crazy low tax basis on thier homes. why would they move ever?
CA is actually the CHEAPEST state to live in for many millions of people. Hard to understand unless you live here and know someone paying less than $400 a year(locked in) in property tax on a 2 million dollar home. You cant beat that anywhere, thank prop 13.
CA=3rd world of US.
@ simi.uber.alles
It's evaluation of their EPO products...
Good one! Zing!
Go check out www.biospace.com - they have tons of opportunties on their career site.
Good Luck.
patrick @ check out biospace...
Also,
not so much for jobs listings, but for rumors, trash talk, etc.
Hey Rob. You said:
"Now that EN is but a shadow of its former self I hope all the remaining readers are either old enough or smart enough to read the ten foot tall letters spray painted on the side of the Conejo Valley."
I may not know where the Conejo Valley is (exactly), but I know a good place to visit when I see one. Been lurking here since I found the place months ago... and no plans to split just because Snowflake is swimming underwater now. ;-)
Wait a minute. Isn't conejo Mexican for gonad?
Sorry for the o/t post.
Hilly,
Go time to turn off your cloaking device and cross over the neutral zone. Should be fun.
FYI, The Conejo (Rabbit) Valley is home to Amgen and Countrywide and 3 other Fortune 500 HQs.
"a third of families with kids thinking of leaving..."
Their kids are a linguistic minority. Immigrants have way more kids, when I visit LA it seems like an english speaking area until I take my kids somewhere (park, beach, ...) for kids under 10 the native english speakers are a minority. Who wants that for their children. California in the present is america, the future is a rural 3rd world spanish speaking culture. If you complain you are a racist, so people just quietly make plans to leave.
@ Hilly: !Cojone! not "Conejo"
@Ridge:
I grew up in a neighborhood in L.A. where a solid majority of families were recent immigrants. It's not the nightmare scenario that some would envision. There were serious problems with crime in our neighborhood, but I would attribute that to the lax law enforcement of the 70's and early 80's. I never felt like an outsider, and when everyone is different from everyone else, you learn to make friends in spite of differences.
When we moved to a traditional American neighborhood, our family found it easier to integrate with the neighbors, and it seemed easier to make friends. But then, I spent the next ten plus years being "the new kid", because our family didn't go back three generations in the neighborhood.
Dawg
Come on back in New Hampshire.
-No income tax
-No sales tax
-Cheap hooch & smokes at State Liquor stores.
School are funded on property tax,but that means you have complete say in what is spent. Stops the run away spending.
When this bubble pops, a lot of companies are going to be throwing people into the streets.
-You look at the stock prices going up up up
-You look at the talking heads who say things have never been better
-You look at the protectionist BS coming out of Congress
-You look at our current president with the "deer in the headlights" glaze in his eyes.
-You see people losing their jobs and houses.
And you think 1929....
The panic will cause the death spiral to be even worse.
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