Bellevue-based online drugstore lays off 60 workers

Associated Press

BELLEVUE —Online pharmacy and retailer drugstore.com has laid off about 60 of its workers, or 10 percent of its workforce, the company announced Friday.

Although drugstore.com recently raised an additional $63 million in backing in August, chief executive Peter Neupert said the layoffs were necessary to keep the company going.

"Drugstore.com intends to take steps to modify its planned spending in order to continue executing on its strategy of sustainable growth," Neupert said. "We believe these cost-cutting steps are prudent and appropriate actions that are consistent with our stated strategy of achieving sustainable growth, while conserving cash on hand."

Company officials said that employees who are laid off will receive a minimum of a month’s pay plus extension of their medical benefits.

Drugstore.com has struggled to keep costs down in the high-priced pharmaceutical business. Over the past year, it has introduced a variety of health and beauty products to increase sales volume.

The company is expected to announce financial results Monday. Wall Street analysts surveyed by First Call/Thomson Financial expect a loss of 64 cents per share, which would be an improvement from the 72 cents a share loss posted in the same quarter a year ago.

Neupert said the quarterly report would be in line with expectations.

On July 24, 1999, drugstore.com had a successful initial stock offering at $18 per share. Its stock hit a high of $55 on Dec. 7, but then fell steadily and hit its low of $2.25 on Monday. It closed unchanged Friday at $2.56 per share on the Nasdaq Stock Market.

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