For the past three or four years, the number of members and congregations in California has declined. Membership was over 770,000 back at the end 0f 2003 and as of the end of 2006 about 750,000. Members are moving away from California to other parts of the country and not being replaced by others moving in. The population of California increases every year, so this is a phenomenon the Church is experiencing in California as opposed to the entire population. The total number of wards was 1,200 for California at the end of 2003 along with 146 branches. At the end of 2006, there were 1,206 wards and 176 branches. So while the number of members declined 20,000, the number of units actually increased!
However, many congregations have been combined in the past year. In the past couple months alone, 10 wards (large congregations) have been closed. Around four or so new wards were created in the same amount of time. Last year, three stakes in California were dissolved. The two areas where most of the members are moving away from are Riverside and Sacramento. The 17 missions in California continue to baptize converts. It can make things seem unsettling though to see membership decline every year for the past three years with this many missionaries in the state. As for why so many members are moving away from the state, I am not sure. It could be from crime, cost of living, or any number of factors.
Lastly, I wanted to say that this is not the first time this happened in California. The same decline in membership and congregations occurred in the 90s when around seven stakes were dissolved. Membership rebounded in the late 90s, along with congregations and new stakes were organized.