Alza lays off 140

Alza lays off 140
By Richard Bammer/ RBammer@TheReporter.com
Posted: 02/25/2009

Vacaville's ALZA Corp., a pharmaceutical and medical delivery systems firm, on Tuesday laid off 140 employees, or more than 18 percent of its workforce, a corporate spokesman said.

Greg Panico, the spokesman, said the firm's parent company, Johnson & Johnson, would not issue a formal press release, but, he added, the layoffs were due to "a delay in a new product the company manufactures for another pharmaceutical company, and, because they were no longer able to work on the product, unfortunately, we had to make these reductions."

He declined to name the company or product, saying the corporation "does not disclose information about partners or products."

The latest layoffs -- affecting 600 employees and marking a 25 percent reduction in ALZA's workforce since October -- primarily affected an unspecified manufacturing department at the Eubanks Drive plant. Additional cutbacks were made in "quality and other support functions as well," Panico noted in an e-mail from his office in Raritan, N.J.

The downsizing comes about four months after the company laid off 40 employees during an effort to "streamline" operations and processes, said then-company spokesman Ernie Knewitz.

Plant General Manager Henry Esparza could not be reached for comment and a spokeswoman for the company did not return telephone calls by press time Tuesday night.

Several employees taking an afternoon cigarette break sat on a bench on Eubanks Drive but declined to respond to questions about the layoffs. The company's spacious parking lot contained noticeably fewer cars than it has in recent weeks.

News of the layoffs did not surprise Michael Ammann, president of the Solano Economic Development Corporation in Fairfield. He said rumors about a pending large layoff at ALZA had been circulating for weeks but without confirmation. He said Workforce Investment Board of Solano County likely would be helping the laid-odd employees with their efforts to re-train or find new jobs within the industry.

Maite Kropp, a Reporter columnist, pet advocate and owner of Harmony Kennels in Allendale, off Interstate 505 north of Vacaville, heard the news through some of her clients who work for ALZA or were formerly employed there. She said they told her the affected employees were told of their layoffs shortly after arriving at work Tuesday morning, then were later escorted to their cars by security.

Two former ALZA employees, hearing news of the latest layoffs, sent e-mails to The Reporter. One said he had not received promised severance payments after being laid off in October; the other, a former administrator, described the company's working conditions as "a typical corporate environment, in which the desire to treat employees humanely was balanced with the need to remain profitable." Both asked not to be identified by name, citing the sensitivity of their employment circumstances, with one saying he was "still involved with the industry."

Panico would not discuss complaints, saying severance pay and other personnel issues, including retirement packages, were confidential matters between employee and corporation.

Tuesday's cutbacks come at a time for increasing difficulties for the pharmaceutical and biotech industries. They face increasing government regulation, loss of patent protection, layoffs and a "churn" among the industries' leading players, reduced capital for research and development, increased costs to develop news drugs and technology and continued outsourcing of jobs overseas.

Like other giant companies trying to do business amid a global economic slump, the worst in several decades, Johnson & Johnson seeks to develop new products, boost revenues while reducing costs to get positive returns on assets, which drives up the price of company stock, satisfying shareholders.

At its Web site, www.jnj.com, the company reported $2.6 billion in revenues for the fourth quarter of 2008 and earnings per share were 94 cents, increases of 3.1 percent and 6.8 percent, respectively, compared to the same period last year.

ALZA was founded in 1968 by Dr. Alejandro Zaffaroni. The company bought its Vacaville campus in 1984 and eventually built a 117,000-square-foot facility.

The company's product line includes Sudafed, a popular cold medication; Nicoderm, a well-known nicotine patch; Doxil, an ovarian cancer medication; and Concerta, a medication for attention deficit hyperactivity disorder, or ADHD. It also makes several "drug-delivery platforms," including patches, pills and injectible medicines.

In recent months, ALZA made news for installing a 1-megawatt photovoltaic solar energy system, spread out over several acres, at its Vacaville site.