Longs begins layoffs in the Bay Area

January 9, 2009 12:00:00 AM PST
More Bay Area workers became victims of an economy in recession. Still, economists predict massive layoffs could continue well into this new year.

On Friday 800 workers at Long's Drugs heard they will be getting the axe, along with 185 more at a solar company in Hayward. Also Cost-Plus of Oakland will close 26 of its 300 stores. All as the Labor Department reports that more than 2.5 million people have already lost their jobs in the last year -- sending the national unemployment rate to 7.2 percent.

Now that the holidays have come and gone, sluggish retail sales will translate into layoffs and employers who didn't want to be Grinches will be more inclined now to hand out pink slips.

The axe fell hard on Friday when 90 employees at the Longs headquarters lost their jobs. Each one left with a manila folder containing their severance package and facing a very uncertain future.

"I've been here 28 years, and it's sad. We're all like a big family, and it's hard to say good-bye," said Kathy Garafalo, a Longs Drugs employee.
"What's next for you? Can you find another job?" asked a ABC7's Moneyscope reporter David Louie.
"I've been looking. I haven't found anything so far. I was in the construction department, so it's a little lean right now," said Kathy Garafalo.

Kathy Garafalo joins more than 11 million Americans out of work. An economist at U.C.'s Institute for Research on Labor & Employment, Sylvia Allegretto, Ph.D., warns the numbers will grow.

"We're going to continue to see massive layoffs probably well into the first quarter of 2009, especially without an economic stimulus package, that seems to be lagging," said Allegretto.

Dave Cahoon, a 19-year-employee, will be among them. He will be laid off in a few months as the new owner of Longs and CVS Pharmacy eliminates duplicate jobs.

"If you look right now, and the reality is it's most likely not going to be in this area," said Cahoon.
"Out of state or out of the area?" asked ABC7's David Louie.
"Out of state possibly because the California market is very difficult right now," said Cahoon.

Even a rapidly growing green tech company like OptiSolar laid off 300 on Friday, which is about half of its workforce. OptiSolar has a photovoltaic panel production facility in Hayward and Sacramento. Despite big projects in Canada and central California, investment capital dried up due to the economy.

"It's very painful. It's a bitter pill. Unfortunately, the economy and the access to capital markets have left us no choice. We have to preserve the core business of the company so we can emerge from this recession and still are able to pursue our vision, our goal to make solar power mainstream," said Alan Bernheimer, the Vice President of OptiSolar.

It's clearly an unsettling time for all employees. At Longs, the new owner is trying to calm jitters with this statement: "We envision that the vast majority of the more than 22,000 Longs employees will continue to be part of the combined company."

California's latest unemployment numbers come out in two weeks.