CVS to cut 2,900 jobs, mostly in corporate roles

Posted by Admin October 1, 2024 Jobs

Spread the love

CVS plans to cut 2,900 jobs, but the cuts won’t affect ‘front-line’ workers in pharmacies, stores, distribution center, spokesman says.

CVS Health plans to cut some 2,900 jobs, primarily in corporate roles, a spokesman confirmed Tuesday morning.

The cuts represent less than 1% of the Woonsocket-based company’s workforce and will not affect “front-line jobs in our stores, pharmacies, and distribution centers,” CVS spokesman Mike DeAngelis said via email.

“Our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance,” DeAngelis said. “As we previously disclosed, we’ve embarked on a multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work.”

“Before taking this step, we prioritized finding cost savings everywhere we could, including closing open job postings,” he said. “Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company.”

Most of the affected workers will be notified this week, he said.

The affected employees will receive severance pay and benefits, including access to outplacement services,” he said.

Asked to for a comment on whether the company’s board is considering breaking up the company, DeAngelis issued the following reply: “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.”

A breakup of retail and insurance units

CVS Health is exploring options that could include a break-up of the company to separate its retail and insurance units, as the struggling healthcare services company looks to turn around its fortunes amid pressure from investors, people familiar with the matter told Reuters.

CVS has been discussing various options – including how such a split would work – with its financial advisers in recent weeks, the sources said, requesting anonymity as the discussions are confidential.

The plan to potentially split the company’s pharmacy chain and the insurance business has been discussed with the board of directors, which is yet to decide on the best course of action for CVS to pursue, the sources said, cautioning that the plans have not been finalized and CVS may opt for a different strategy.

The latest discussions come as CVS faces increasing pressure from investors such as Glenview Capital, which is said to be pushing for changes at the company to help improve its operations, after it cut its 2024 earnings outlook for a third consecutive quarter in August.

CVS, which has a market value of about $79 billion and held long-term debt of roughly $58 billionat the end of December, in August lowered its annual profit forecast to $6.40 to $6.65 per share, from its previous forecast of least $7.00 per share.

With Reuters reports