CVS lays off 2,900 workers in cost-cutting move. Here’s what to know.
CVS Health said it is cutting about 2,900 employees as part of a goal to reduce costs by $2 billion.
The job cuts represents about 1% of the health care company’s workforce, a CVS spokesperson told CBS MoneyWatch via email.
Some pharmacy chains have struggled in recent years amid cutbacks from inflation-weary consumers, with shoppers paring their spending on non-prescription items. Walgreens is planning to close up to a quarter of its 8,600 retail locations as some customers have turned elsewhere to buy basics.
In its statement, CVS pointed to “continued disruption, regulatory pressures, and evolving consumer needs and expectations,” adding that “it is critical that we remain competitive and operate at peak performance.”
In its most recent quarter, CVS said its same-store sales for non-prescription products declined 4%.
What to know about the CVS job cuts
CVS, which along with its drugstore chain also owns health insurance provider Aetna and pharmacy benefits manager CVS Caremark, among other brands, said the 2,900 job cuts will primarily affect corporate roles.
“The reductions will not impact front-line jobs in our stores, pharmacies and distribution centers,” CVS said.
Employees whose jobs are part of the reduction will receive severance pay and benefits, including access to outplacement services, the company added.
“The vast majority of impacted colleagues will be notified this week,” the CVS spokesperson noted.
Separately, CVS is reportedly conducting a strategic review of its business, which could include a breakup of the health care company, the Wall Street Journal reported, citing people familiar with the matter.
Asked about the report, the CVS spokesperson said: “CVS Health’s management team and Board of Directors are continually exploring ways to create shareholder value. We remain focused on driving performance and delivering high quality healthcare products and services enabled by our unmatched scale and integrated model.”
