Local Companies Look to Layoffs to Balance the Books

At least two major companies in San Diego are expected to lay off significant numbers of employees in the coming months, though the precise local impact is not yet clear.

State unemployment figures are scheduled to be released on Friday.

[See related story about what analysts predict.]

The two companies—Borders and Cisco—each announced big staffing changes this week. Borders, the long-struggling bookstore chain which has already shuttered three San Diego-area locations this year, plans to liquidate its remaining 399 stores, affecting nearly 11,000 employees. In the spring, the company shut down its Carmel Mountain Ranch location on Rancho Carmel Drive, leaving local readers without a Borders, but not without a book store.

Page-turners seeking a Harry Potter fix or a new comic for superheroes to sign at Comic-Con this weekend need only trek a few blocks up the street to a Barnes & Noble. 

Borders is expected to appear in U.S. Bankruptcy Court on Thursday, July 21 for final approval of the liquidation deal with Hilco and Gordon Brothers. Some stores could begin liquidating as soon as Friday, the company said in a statement.

"Following the best efforts of all parties, we are saddened by this development," Borders Group President Mike Edwards said. "We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now."

Two Borders are left in the San Diego area: in Mission Valley, at 1072 Camino Del Rio North and in National City at 3030 Plaza Bonita Road. In addition to the Carmel Mountain Ranch location, stores in El Cajon and downtown San Diego also were closed this year.

On the same day Borders made its announcement, Cisco—an international technology company with an office in the Sorrento Valley neighborhood of San Diego—said that it would lay off 6,500 employees, or 9 percent of its workforce.

Spokeswoman Karen Tillman said it's not yet clear how—or if—this local office will be affected by the layoff plans.

"I just don't have that information," she said. More information is expected to be released in August.

The so-called "action plan" includes in its 6,500 layoffs 2,100 employees who chose to participate in a voluntary retirement program, according to a company statement. Executive-level staff will be cut by 15 percent.

"While these decisions do not come easily, we believe we have right-sized the organization and realigned our workforce to support our priority areas, while retaining the capabilities and talent to effectively support our long-term strategy," the statement said.

The company said it hopes to reduce fiscal year 2012 costs by $1 billion, a goal to be partially achieved through the layoffs.

Some companies have avoided layoffs so far this year, such as Rancho Bernardo-based Sony Electronics. The company has 2,600 employees in San Diego and has not conducted layoffs this year, said John Dolak, a company spokesman.