CVS Health plans to lay off around 2,900 employees as part of an ongoing effort to cut costs by $2 billion. The layoffs, affecting less than 1% of its workforce, primarily target corporate positions rather than frontline employees in stores, pharmacies, or distribution centers.
CVS has faced challenges such as regulatory pressures, changing consumer behavior, and heightened competition from companies like Amazon and Walmart. These factors have contributed to the decision to streamline operations and reduce expenses.
Based in Woonsocket, Rhode Island, the company has already been closing stores to reduce costs, with plans to shutter 900 locations over the next few years. In 2023, CVS aims to close 315 stores, with 72 closures already completed. Other major pharmacy chains like Rite Aid and Walgreens Boots Alliance have also been struggling with similar financial challenges, leading to store closures across the sector.
CVS is under additional pressure from shareholders, including hedge fund Glenview Capital Management, which has been pushing for improvements in the company’s operations.
Although CVS declined to comment on specific discussions with Glenview, it emphasized that it is actively engaging with the investment community. The company also noted that it explored other cost-saving measures, such as freezing open job postings, before deciding on the layoffs.
