CVS Health Announces Major Job Cuts in Cost-Saving Initiative

Struggling CVS slashing nearly 3K jobs: 'Industry faces continued...

CVS Health announced that it will cut 2,900 jobs as part of a cost-cutting plan. The layoffs will mostly affect corporate positions, a CVS spokesperson told FOX Business. More than 300,000 people work for CVS across its segments, according to its website. The cuts represent 1% of the company's workforce. The job cuts will not affect front-line jobs in CVS stores, pharmacies or distribution centers, the spokesperson said. "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. "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," the spokesperson told FOX Business. CVS Health CEO Karen Lynch said in August as she announced the initiative that the savings would be "driven by further streamlining and optimizing our operations and processes, continuing to rationalize our business portfolio, and accelerating the use of artificial intelligence and automation across the enterprise as we consolidate and integrate platforms." CVS "prioritized finding cost savings everywhere we could, including closing open job postings" prior to deciding to pursue the layoffs, the spokesperson told FOX Business. The company generated total revenues of $91.2 billion in the second quarter. Its adjusted earnings per share dropped 17% year over year to $1.83. CVS also lowered its earnings per share and cash flow guidance for the full-year to "reflect continued pressure in the Health Care Benefits segment," it said at the time.

CVS Health to lay off nearly 3,000 workers in cost-cutting drive

The CVS layoffs represent less than 1% of the company's workforce. CVS Health is planning to cut about 2,900 jobs in an effort to slash costs, the US health care company said Tuesday. "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," a spokesperson said in a statement. The layoffs represent less than 1% of CVS Health's (CVS) workforce. "Impacted positions are primarily corporate roles. The reductions will not impact front-line jobs in our stores, pharmacies and distribution centers," the spokesperson added. The job cuts at the company, which runs a network of pharmacies across the United States among other businesses, add to the 5,000 or so layoffs disclosed last year. In 2021, CVS Health announced that it would close around 900 stores between 2022 and 2024. "Our industry faces continued disruption, regulatory pressures and evolving consumer needs and expectations," the spokesperson said Tuesday. US drug store chains are struggling because of falling reimbursement rates for prescription drugs, according to analysts who cover the industry. At the same time, the front end of drug stores, where snacks and household staples are sold, has become less profitable as shoppers buy more of these items online from Amazon and at big-box chains such as Walmart, Target and Costco. Dollar General's growth has also hurt drug store chains in rural areas. CVS Health, which already uses artificial intelligence in some of its businesses, is making additional investments in the increasingly popular technology, as well as in robotics, "to further automate, reduce cost and improve the experience for all of its constituents," according to its latest annual report.