Amgen layoffs reverberate thoughout community
By Nancy Needham  nancy@theacorn.com

BILL SPARKES/Acorn Newspapers SIGNS--The entrance to Amgen headquarters in Newbury Park

Using a variety of procedures, including laser technology, Dr. Franz Michel helps his patients to see. But Michel's future, as well as the future of his many patients from Amgen, is now unclear.

The biotech giant announced last week it will restructure by reducing staff 12 to 14 percent-- that's 2,200 to 2,600 workers--and making other cutbacks.

"It's definitely a concern, but I'm optimistic," Michel said.

Three years ago he purposely put his ophthalmology office right down the road from one of Ventura County's biggest employers so he would have a constant supply of patients, he said.

"My practice is diversified, and so I feel we can weather a storm," Michel said. "People will still need to have their eyes checked."

Also optimistic are Jamshid Damooei, economics professor at California Lutheran University, and Gary Wartik, economic development manager for the city of Thousand Oaks.

"The sky is not falling," Wartik said. "The economy operates in cycles, and though this is difficult for those losing their jobs, it is not all that unusual."

"People should not get into a state of panic. This is not a runaway train; it's not doom and gloom- it's a waitandsee situation," Damooei said.

The Amgen downsizing initiatives are expected to be complete by 2008 and save the Newbury Park company about $1 billion.

One impetus for the cutbacks were recent approval changes from the FDA affecting how the drugs Epogen and Aranesp are to be labeled, according to CEO Kevin Sharer.

"At Amgen we have always been committed to investing in the future while squarely facing the challenges of today," Sharer said. "Recent changes in coverage rules and adjustments to Amgen's FDA approved labels for Epogen and Aranesp have and will adversely affect Amgen's revenue.

"The initiatives announced today respond to that new reality by taking account of reduced revenues and appropriately lowering costs across the company," Sharer said. "We will continue to strongly support our research efforts directed at development of new medicines for grievously ill patients. These changes will also position Amgen for success in 2008 and beyond."

"At this time we very simply do not know how many of the job cuts are going to be in Thousand Oaks," Wartik said. "It's obviously going to be very challenging for those affected directly. No community likes to lose jobs, especially quality jobs."

Not only those directly hit will be affected. Those who provided services in the community, such as mechanics, dry cleaners, physicians, pet groomers and restaurant owners, will also be affected.

"More than one job is lost when there is a layoff. Our model of Thousand Oaks tells us one lost job equals about two to two-and-a-half jobs lost," Damooei said.

Although Thousand Oaks isn't growing as rapidly as it used to, the city still requires a strong tax base for general maintenance. But the tax revenues could fall due to Amgen's restructuring.

The city's two-year budget recently took about $40 million out of reserves and may have to make adjustments if the expected tax revenues fall short.

Residents shouldn't worry too much at this time, city leaders have said.

Thousand Oaks is doing fine, Wartik said.

"We are well-balanced with over 4,100 employers and 82,000 jobs."

Amgen discovers, develops and delivers human therapeutics. A biotechnology company since 1980, Amgen brings medicines from lab to manufacturing plant to patient. Amgen drugs are used in the fight against cancer, kidney disease, rheumatoid arthritis and other illnesses.