Spectra-Physics hit hard as telecom industry wanes

Once it was the pride of Oroville, with more than 400 well-paid employees making sophisticated laser and optical equipment for high-tech companies. That was 18 months ago. Now it’s down to about 100 employees and struggling not to lose more.

With Wall Street in shambles, many local companies are feeling the pressures of a bottoming economy. But none has suffered more than the Oroville branch of Spectra-Physics.

On July 17 the company laid off another 15 employees in its fourth round of cuts. Spokesman Craig Donnelly attributed the layoffs to “downsizing in telecommunications.”

Spectra-Physics is involved in the production of optical components such as lenses and prisms—a field called photonics, and one Donnelly described as “huge.” But right now, nobody’s buying.

Overzealous market predictions are to blame, Donnelly said. With the boom of the Internet, broadband services and other communications technology, the industry grew exponentially.

“This was an industry projected to grow dramatically over the next few years,” Donnelly said. “What happened was we ended up with a whole bunch of inventory, and that worked all the way up the food chain.”

The company responded to the failing market by terminating 300 employees, which included temporary employees, over the last 18 months. Workers were told that their jobs “were going away” and given two weeks’ notice and severance pay and offered job placement services from Drake Beam Morin. This “strategic human resources group” helps companies deal with workforce issues—and is helping former employees find new jobs and get personal counseling.

Meanwhile, the Oroville branch of Spectra-Physics carries on as best it can with its telecommunications business now dissolved and the remaining 115 employees moved into the “main business.” In short, it’s retooling. The company will focus on its other products such as machine ports and guidance systems for planes and missiles.

The company is positioned to reopen the telecommunications division should the market take an upswing, Donnelly says, but that "won’t be for a while."