The first wave of Molina Healthcare layoff notices is in progress, and the company notified a local agency Thursday the jobs of 25 people working in Long Beach will be eliminated as of the beginning of October.

Molina Healthcare delivered notice to Pacific Gateway Workforce Investment Network, a Long Beach-based public agency charged with helping people in the Long Beach and San Pedro areas train for and obtain jobs. Molina Healthcare is Long Beach’s only Fortune 500 company and news of a major downsizing broke on Monday.

A federal law known as the WARN Act requires companies with at least 100 employees to let local governments know when layoffs or plant closures are coming.

Pacific Gateway Executive Director Nick Schultz confirmed the notice in an email. The company’s notice to Pacific Gateway reveals plans to cut 54 positions by Oct. 1 in California.

A company memo obtained Monday revealed Molina Healthcare executives plan to cut their corporate and health plan sections by 10 percent, an action that could entail more than 1,400 people losing their jobs. Molina Healthcare did not provide detailed comment on the news.

“We thank all of our departing colleagues for all they have done to accomplish the Molina Mission. We will be working to assist our departing employees in many ways, including severance and outplacement assistance, to ease the transition,” a Molina Healthcare statement issued Thursday said.

News of the layoffs comes nearly three months after Molina Healthcare’s board of directors fired longtime executives J. Mario Molina and John Molina, who respectively had worked as the firm’s chief executive and chief financial officers. Although the U.S. health care industry is in a state of uncertainty amid political developments that may lead to the repeal of the Affordable Care Act, downtown Long Beach itself has seen its business climate improve considerably over the past several years.

And Molina Healthcare played a major part in that local trend.

Downtown presence

Whether observers are trumpeting the influx of new restaurants or lamenting spiking rental rates, there’s little doubt downtown Long Beach is a much different place than it was at the beginning of this decade.

Downtown Long Beach’s office market has generally grown more robust over the past five years, according to data released Tuesday by the Downtown Long Beach Alliance.

The DLBA is an organization created by city government to promote business in the city’s core. Although office vacancy rates have increased over the current year — from about 12 percent in 2016 to a shade under 13 percent during the April-June quarter — current vacancies are still below the 16 percent level recorded in 2012.

Over the same period, average asking rates have risen from $2.05 per square foot to $2.44 during the second quarter of this year.

Among current developments in the downtown office market, the DLBA reports a $5 million renovation of the World Trade Center complex is on the verge of completion. Molina Healthcare itself had its hand bringing new energy to existing properties when the company accomplished its renovations of the Meeker-Baker and former Press-Telegram buildings, both near the corner of Pine Avenue and Sixth Street. The company’s move-in to those buildings began in 2013.

Could downtown Long Beach evolve as it has without Molina Healthcare’s recent employment growth?

“I’m thinking yes, but maybe not exactly the same. And I don’t want to take away from what they’ve done. Sixth and Pine is a beautiful job,” said Mike Dunfee, a real estate professional who runs the Mike Dunfee Group at Engel & Volkers Long Beach.

Engel & Volkers is a German company that describes itself as a luxury brand within the real estate world. The firm announced its affiliation with the former DOMA Properties in January.

Dunfee, who acknowledged his concern that potential job losses in downtown Long Beach could hurt local restaurateurs, also expects downtown to be capable of withstanding any setbacks experienced at Molina Healthcare.

Engel & Volkers, he said, would not have come to downtown Long Beach if the market was weak.

“We are getting that cachet of ‘things are starting to happen,’ ” Dunfee said.

Political challenges

Molina Healthcare built its business on operating Southern California clinics and offering health plans for people who receive coverage with help from government assistance programs like Medicaid and Medicare. The passage and implementation of the Affordable Care Act, which among its many provisions led to an expansion of Medicaid rolls, sustained the company’s rapid growth after Barack Obama signed the law in 2010.

Molina Healthcare’s employment quintupled from between the end of 2010 through the end of 2016, when the company had some 21,000 workers in all the states where it does business.

Molina Healthcare had some 4.8 million health plan members as of the end of March, according to its most recent quarterly earnings report. Some 684,000 of those members came to Molina Healthcare as a result of the Medicaid expansion, and more than a million additional customers acquired health plans via government-supported marketplace plans such as Covered California.

In mid-February, Molina Healthcare’s former leaders disclosed the company may cease offering marketplace plans on a state-by-state basis. The company offered such plans in nine states.

The future of Medicaid and a plethora of health care-related issues are up in the air as Congress debates whether to repeal the Affordable Care Act and what exactly may replace that legislation.

Although Molina Healthcare has benefited from the Affordable Care Act, Beacon Economics founder Christopher Thornberg, doesn’t see the newly announced layoffs as a signal of widespread problems for the health insurance industry in California. He also anticipates Sacramento will counteract any legislation from Washington, D.C., that reduces public support for health coverage.

“I will be very cautious to say this is reflective of the industry as a whole,” he said. “Even if they do change federal law, you know that’s not going to filter down here into the state.”

“It’s just not going to happen. We’re very left, as you know,” he also said.

USC’s Glenn Melnick, the university’s Blue Cross of California Chair in Health Care Finance, similarly does not view recent happenings within Molina Healthcare as being indicative of broader troubles for California insurers.

“I am guessing that Molina is among the least diversified in terms of patient mix and therefore highly dependent on Medicaid and Obamacare individual enrollment and at risk for any cutbacks related to the current debate in D.C.,” he said in an email. “ I do not think any of the federal policy changes will be immediate if they happen.”

Melnick also said the company could be using its management change as an opportunity to make painful decisions that may become necessary if prospective Medicaid cuts are enacted.

Additional details of Molina Healthcare’s plans may emerge when the company discloses financial results for the April-June quarter on Wednesday.