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Week in Review : MAJOR EVENTS, IMAGES AND PEOPLE IN ORANGE COUNTY NEWS : CITIES : Irvine Co. Lays Off 18% of Staff in Cost-Cutting Move

July 06, 1986|Times Staff Writer Maria L. LaGanga compiled the Week in Review stories

The Irvine Co. announced that it will dismiss 18% of its work force in the largest cutback in company history, to adjust to an era of slimmer real estate profit margins and a local glut of high-rise office buildings.

The giant Newport Beach land development company said in a prepared statement Wednesday that it was dismissing 240 of its 1,343 employees as "the final step in an 18-month review and restructuring of management operations to respond to anticipated business activity."

Company President Thomas H. Nielsen said about 30% of the employee cuts are in the company's office development operation. He said the company has temporarily stopped the construction of additional office buildings because of soaring vacancy rates in the commercial district near John Wayne Airport, which has been the site of a high-rise building boom.

"We didn't expect the extent of the office building in the area and throughout Orange County," Nielsen said. There is a 33% tenant vacancy rate near the airport--the highest rate in Orange County--according to the real estate firm of Coldwell Banker.

Officials in several Orange County cities predicted Wednesday that there would be no immediate impact on the company's building projects planned for their communities.

However, local advertising and public relations executives and consultants contend that the cutbacks could force some dramatic changes in the way the monolithic--and often mute--company deals with the public.

The Irvine Co. may be forced to make unprecedented public relations moves--and publicity-shy Chairman Donald Bren may have to meet with the media--to help overcome the image damage that has suddenly placed the county's largest developer on the defensive, they said.

"There is nothing more important to the Irvine Co. than its image," said Martin Brower, the Irvine Co.'s former director of media relations. Brower is now a consultant and publisher of Martin Brower's Orange County Report.

"The company has to communicate good will in order to continue getting permission to build," he said.

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