CVS Health (CVS.N), a U.S. pharmacy operator, is laying off 5,000 employees, according to a staff memo obtained by the Wall Street Journal.
CVS Health is planning to cut 5,000 employees across the country. The move follows billions of dollars in spending by the retail pharmacy giant to add healthcare services to its stores and medical care partner networks’. CVS has confirmed to news agencies that the company is cutting certain non-customer-facing personnel to cut costs but would not disclose the number of people affected.
According to a business official, CVS does not anticipate any effects on the employees who interact with customers in its pharmacies, clinics, shops, or customer support centers. Several news agencies reported that the drugstore behemoth, which employs over 300,000 people nationwide, would inform the 5,000 affected employees in the coming weeks, citing a message delivered to employees on Monday. CVS noted in the message that it is "evolving to adapt to new consumer health needs and expectations."
The Rhode Island-based company has over 9,000 retail stores and 1,100 walk-in clinics around the country. The corporation controls one of the major health insurers in the country as well as the largest pharmacy benefit manager, which negotiates prescription discounts with manufacturers on behalf of health insurers. However, CVS has increased its focus on health care in recent years, following similar initiatives by competitors such as Walgreens and tech behemoth Amazon. CVS lowered its annual profitability outlook in the fourth quarter, citing the cost of those transactions.
CVS Health provides a variety of healthcare services, such as retail pharmacy, pharmacy benefits management, health insurance, and MinuteClinic, a retail health clinic. Omnicare, a provider of long-term care pharmacy services, and CaremarkPCS, a provider of specialty pharmacy services, are two of the company's specialty companies. The layoffs are a sign that CVS's health care business is experiencing some difficulties. However, the business continues to be a significant participant in the healthcare sector, and it is likely to make investments in this area going forward.