Longs Seeks to Cut Its Workforce by 2%

Longs Drug Stores Corp. offered buyouts Monday to all store managers as part of an attempt to trim its workforce by about 2% and to centralize operations.

The buyouts are part of a program to change store operating procedures, Walnut Creek, Calif.-based Longs said without being more specific. Employees have until July 21 to accept a buyout and will leave between Aug. 1 and Sept. 2. Longs has about 22,000 employees.

The chain has 463 stores in the Western states and Hawaii. The buyouts were offered to the managers of each store.

The company said it would give details on the acceptance rate and cost of the program around Aug. 20, when the company reports second-quarter earnings. In May, Longs lowered its forecast for the year, saying unemployment in California and customer worries about the economy were hurting sales.

The company is switching to a program that may give managers less autonomy, Chief Financial Officer Steven McCann said in an interview.

“Since we are changing the game we’d like our managers to sign up for the new strategy,” McCann said. “But in the event that they can’t we’d like to offer a store separation program.”

The managers will be replaced with executives the company currently employs, he said. The company expects most of the managers to stay and McCann declined to give a target for how many will accept the buyout offer.

Sales at Longs drugstores open at least a year, declined 0.8% in the first quarter. The company expects same-store sales to be little changed or decrease by as much as 2% this year, it said in May.

Shares of Longs rose 15 cents to $16.40 on the New York Stock Exchange. They have declined 21% this year.