Apple's 174 job cuts are blow to Elk Grove

By eliminating 174 jobs at its Elk Grove campus, Apple Inc. created more economic problems for a suburb that's been hit particularly hard by the real estate downturn.

Apple said Thursday it's moving some of its sales and support functions from Elk Grove to the company's site in Austin, Texas. A spokeswoman declined to give an explanation for the move.

By midday, employees at the Laguna Boulevard facility could be seen consoling each other in the parking lot and hauling boxes of belongings to their cars. One was overheard telling a friend, "I don't have a job."

The layoffs represented the latest twist for Apple, whose Elk Grove employment has fluctuated considerably since it arrived here in 1992.

At first it was known mainly as a factory, and production of the candy-colored first-generation iMacs in the late 1990s was a point of pride for Elk Grove. But the iMac work was moved elsewhere in 1999, and in 2004 Apple closed the assembly line and laid off 235 workers.

Production work was outsourced to an assembly firm in Southern California.

Other big tech companies in greater Sacramento have downsized in recent years, including Intel Corp. and Hewlett-Packard Co.

But Apple retains a comparatively strong presence in the region, mainly in customer and technical support, distribution and sales. It employs more than 1,100 workers in Elk Grove, up 50 percent in the past three years, said company spokeswoman Kristin Huguet.

Separately, Apple employs about 150 customer support workers in Rancho Cordova.

"While it's very disappointing that 174 people are going to be laid off, we're still fortunate that the company remains a major employer in Elk Grove," said Steve Czarnecki, executive director of the Elk Grove Economic Development Corp.

Still, the job cuts come at a particularly difficult time. Real estate analysts say Elk Grove is doing worse than most other parts of the Sacramento region. Vacancies at its smaller strip malls were three times as high as the region's average at the end of 2007.

Residential foreclosures there have more than quadrupled this year and are growing at a faster rate than in Sacramento County as a whole, according to Foreclosures.com, a Fair Oaks-based Web site for investors.

The Apple decision is "just more bad news for Elk Grove," said Garrick Brown, research director at Colliers International real estate's Sacramento division. "It sure seems like they continue to face challenges down there on all fronts."

He noted that AAA of Northern California is closing its 500- employee Elk Grove call center by 2011.

But Mayor Gary Davis, while calling the Apple layoffs "saddening," said the suburb is holding its own economically. He cited construction of the new Elk Grove Promenade shopping mall, due to open next March, and Sutter Health's plans to build a hospital in the city.

"There is a significant amount of economic activity occurring now," Davis said.

The layoffs include 99 representatives for Apple's Internet sales operation and 41 employees who conduct online chats with customers, according to layoff notices sent to state and city officials.

Huguet said the employees will be given the chance to relocate or apply for other work in Elk Grove.

About the writer:

• Call The Bee's Dale Kasler, (916) 321-1066. Bee staff writers Loretta Kalb and Phillip Reese contributed to this report.