WALNUT CREEK — About 800 Longs Drug Stores corporate employees who work in the East Bay will lose their jobs, starting this year, as a result of the company's purchase by fellow drug retailer CVS Caremark, CVS disclosed Thursday.

The positions affected are in the headquarters and other offices in Walnut Creek, as well as a secondary corporate office in Antioch.

The affected employees have been notified. CVS completed its $2.7 billion purchase of Longs on Thursday.

"We did anticipate overlap in our corporate functions and after careful evaluation estimate 800 positions will be affected," said Eileen Dunn, a senior vice president with Rhode Island-based CVS Caremark.

The primary job categories that are affected include administrative, human resources, I.T. (information technology) and other operations.

"Within the next several months, we plan to release these employees from Longs corporate operations and to close corporate facilities in Walnut Creek and Antioch," Dunn said.

The facilities include two Longs Drug's corporate operations in Walnut Creek: the company headquarters downtown and an office in the Shadelands business center northeast of the downtown.

During a conference call to discuss financial results for its third quarter of 2008, Thomas Ryan, CVS chairman, president and chief executive officer, provided some details about the timing for an array of events that will affect corporate operations and retail sites.

"We will not disrupt the stores during the holiday season for obvious reasons," Ryan told analysts. "So the integration will really start in the first quarter of 2009."

Among the key events in the time line to bring the former Longs operations fully into the CVS fold: Conversion of store electronic systems should begin by March and be complete by the end of May. The corporate offices will close by the end of the summer. About 80 percent of the corporate operations should be closed by June. Renaming and remodeling of stores should start by mid-March and be completed by mid-October.

"Longs will be fully integrated by the fourth quarter of 2009," Ryan said.

In an earlier proxy filing, Longs disclosed the severance pay that several Longs executives received severance packages, sometimes known as "golden parachutes," because of the change of ownership:

  • Warren Bryant, president and chief executive officer, a $23.6 million severance package.
  • Steven McCann, chief financial officer, a $6.6 million severance.
  • Bruce Schwallie, executive vice president, a $4.8 million severance.

    In addition, on Oct. 22, Bryant filed papers with regulators that detailed his sale this month of 515,000 shares of Longs stock options or other derivatives at prices ranging from $22.45 to $27.40. The combined value of the shares sold, based on the listed price per share, was $12.7 million.

    "The mood by many at the office is despondent," said one employee who expects to be laid off and who requested anonymity. "Many of the employees have worked for Longs for many years and feel a sense of loss as Longs has been a local and family-run organization for many years."

    One employee also noted that the job cuts come during a tough period.

    "Compounding the normal sensitivity of job loss is the timing of this acquisition during very difficult economic times," the employee said. "We are all very concerned with the ability to find employment in this difficult market."

    These employees who are affected will be eligible for a transition package to cover financial and health benefits, outplacement support and counseling, CVS spokeswoman Dunn said.

    "Only a small fraction of Longs are affected and we envision that the vast majority of the more than 22,000 Longs employees will continue to be part of the combined company," Dunn said.

    George Avalos covers jobs, economic development, commercial real estate, finance and oil companies. Reach him at 925-977-8477 or gavalos@bayareanewsgroup.com