Daniel Hedigan, named CEO of Irvine-based FivePoint Holdings six weeks ago, has cut one in five of the developer’s staff.
The move follows a conference call with analysts earlier this month, when Hedigan said the developer of the 10,000-home Great Park Neighborhoods in Orange County and FivePoint Valencia in the Santa Clarita Valley in L.A. County would “do more with less,” the Orange County Business Journal reported.
“We announced a layoff of 31 FivePoint associates, which represents approximately 20 percent of our workforce,” the company said in a statement. “We are proud that we were able to keep the team together through the pandemic, however we feel that now is the appropriate time to reassess our operations and cost structure to properly fit the size and scale of our business.”
In a shake-up of its C-suite early last month, Hedigan replaced FivePoint founder Emile Haddad, who had stepped aside as chief executive and executive chairman in September and took the title of chairman emeritus.
Hedigan had recently served as president of land sales and home building at Donald Bren’s Irvine Company, the largest developer in Southern California.
The turnover at the top of FivePoint also saw the departure of its president and chief operating officer, Lynn Jochom, as well as Erik Higgin as chief financial officer.
Lennar Corp. Executive Chairman Stuart Miller became executive chairman of FivePoint when Haddad stepped down from a day-to-day role last summer. Miami-based Lennar is a cofounder of FivePoint, with a stake of about 40 percent in the company.
In the March 10 conference call with analysts, Hedigan said a key focus for the company was to “optimize and rationalize our cost structure to properly fit the size and scale of our business.
“We will look to do more with less,” he said, according to a Motley Fool transcript, “and hold ourselves accountable as we drive bottom line performance and focus on building shareholder value.”
FivePoint (NYSE: FPH) was valued around $909.2 million as of Monday morning, with a share price of $6.13, showing a year-over-year drop of 19.3 percent, according to Yahoo Finance.
The developer is building the Orange County Great Park, envisioned two decades ago as the “Central Park of the West Coast.” The project is redeveloping the former 4,700-acre El Toro air base into a public park with plans for a master community to include more than 10,000 homes.
The company is also moving forward on developing FivePoint Valencia in the Santa Clarita Valley. Formerly called Newhall Ranch, the 12,000-acre project calls for 21,000 new homes in north Los Angeles County.
In the San Francisco Bay Area, a FivePoint property has been embroiled in a legal fight related to the potential release of toxic pollutants at another planned community of 3,500 homes and 656,000 square feet of commercial space at a former Navy shipyard at Hunters Point.
FivePoint is also developing a 7,200-home community called Candlestick Point. Approved plans for the site of the San Francisco Giants’ former stadium include more than 1 million square feet of office and retail space, and a 220-room hotel.
[Orange County Business Journal] – Dana Bartholomew