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September 19, 2020

Fox Factory joins large local companies in mass layoffs

Fox Factory, Inc. has temporarily laid off 85 employees from its Watsonville facility on Hangar Way and another 159 employees from its headquarters in Scotts Valley, state filings show.

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The reductions came weeks before its parent company Fox Factory Holding Corp, which designs and manufactures products for bicycles and off-road vehicles, announced that first-quarter sales increased by roughly 14 percent to $184.4 million compared to the same period last year. Much of that increase was a result of the recent acquisitions of Ridetech and SCA Performance, the company said in a press release.

“In an unprecedented operating environment, our global team has done a tremendous job to come together and support the needs of our customers,” CEO Mike Dennison said in a press release. “The health and safety of our employees remains our number one priority, and we believe we are well positioned with our diversified business model to manage through these challenging times and emerge stronger.”

Multiple calls into the company’s Watsonville office asking when those employees would be brought back, among other things, were not returned by noon on Wednesday.

The mass layoffs have become commonplace for some of the county’s largest employers as companies have been forced to close because of the shelter-in-place orders intended to slow the novel coronavirus.

The Santa Cruz Seaside Company, which owns the Santa Cruz Beach Boardwalk, temporarily laid off 1,097 employees on May 1. Other hospitality companies such as Aptos Hotel Management, LLC, Chaminade Resort and Spa and Dream Inn Hotel Associates have also laid off dozens.

Watsonville’s Coastal Nursery laid off 110 employees days after Santa Cruz County imposed its shelter-in-place restrictions.

Officials have said the county’s unemployment rate has skyrocketed from 3.5 percent to over 20 percent during the Covid-19 outbreak.

Companies that employ at least 75 workers are required by state law to give employees at least a 60-day notice of layoffs or closures under the Worker Adjustment and Retraining Notification Act. The WARN notice must also be submitted to the state.

However, a March executive order from Gov. Gavin Newsom temporarily suspended the 60-day notice due to the Covid-19 pandemic.

These numbers are an unknown percentage of the total number of employees laid off because of the economic downturn, as employers with less than 75 workers do not have to file a notice.

According to the U.S. Department of Labor, the California Employment Development Department (EDD) over the last nine weeks has processed roughly 4.7 million unemployment insurance claims and paid out $12.3 billion in total benefits to Californians seeking financial assistance.

Tony Nuñez
Tony Nuñez
Managing Editor Tony Nuñez is a longtime member of the Watsonville community who served as Sports Editor for five years before entering his current role in 2019. A Watsonville High, Cabrillo College and San Jose State University alumnus, he covers the city, business, housing, entertainment and more.

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