MERCED — Directory Distributing Associates is closing its Merced operation and laying off 42 employees by Jan. 27, according to Merced County's Department of Workforce Investment.
The company, which distributes Yellow Pages directories and telephone books, was outbid by Product Development Corp. of Monterey for the Yellow Pages contract, according to a company spokesman.
Product Development Corp. held Merced's contract prior to Directory Distributing Associates taking over in August 2004.
Directory Distributing Associates issued a Worker Adjustment and Retraining Notification to the state's Employment Development Department and the county on Nov. 27 notifying them of the 42 layoffs.
According to the documents, the company said it's not required to provide the notice, but it wanted to give the county an "opportunity to assist the displaced employees."
By law, a WARN notice must be issued by a company to the state if the company has 75 or more full-or part-time employees and is laying off 50 or more people. A federal WARN is issued if a company has 100 or more employees and is laying off 50 or more people.
The notice doesn't always mean a business is closing entirely. But Directory Distributing Associates' paperwork cited "permanent closing of our operation."
Employees at the Merced company, at 1870 Wardrobe Ave., said Thursday that Product Development Corp. plans to keep some, but not all, of the local workers.
A phone call to Product Development Corp. on Thursday was not returned.
The 42 employees who will be laid off are three clerical or mail employees; 15 couriers who deliver the directories; 11 warehouse workers; and 13 supervisors or management staff.
Frank Quintero, Merced's economic development director, said the layoffs will have a significant impact on the employees' families as well as the local economy.
"It decreases their purchasing power, so they no longer are able to buy what they used to purchase," he said. "They won't have that money to circulate in the local economy."
The decrease in spending could have a "multiple effect" on area businesses, including the retail industry, Quintero noted.
A spokesman for Directory Distributing Associates said it's unknown why another distributing company was selected to replace its delivery services. However, officials speculate the business might be negatively impacted by computers.
"You're seeing technology affect traditional industry," said Quintero. "The Internet is making some of the older resources, such as directories, obsolete."
Quintero said there are a number of companies in Merced that are expanding, so they may be able to pick up Directory Distributing's displaced employees.
The county's Department of Workforce Investment helps displaced employees prepare for other jobs by providing résumé workshops, assessments and training opportunities.
Operations officer Jackie Walther-Parnell, who's been with the department more than 11 years, said the Rapid Response Team reached out to Directory Distributing's employees on Jan. 7. to offer support services.
"We will be looking at what skills they have that are transferrable to other occupations," Walther-Parnell said. "We do an assessment test to help them identify other types of jobs they might want to pursue."
Reporter Ramona Giwargis can be reached at (209) 385-2477 or email@example.com.