A CVS pharmacy retail drug store with a MinuteClinic and Health Hub in New York City. The chain is cutting jobs as it broadens from its retail roots into more health-care offerings. Ted Shaffrey/Associated Press
CVS Health will cut 5,000 positions from its workforce to help cut costs as the drugstore chain focuses on broadening from its retail roots into more health-care offerings.
None of the job losses will impact customer-facing positions in stores, pharmacies, clinics or customer services centers, a spokesman for the Woonsocket, Rhode Island-based company said Tuesday. It had more than 300,000 employees as of the end of 2022. CVS operates 26 stores in Maine. The decision is part of an initiative to reprioritize investments around care delivery and technology and reduce expenses, the spokesperson said.
CVS’s move deeper into patient care includes the recent acquisitions of home health-care provider Signify Health and primary-care company Oak Street Health.
Last quarter, CVS cut its annual earnings forecast, citing costs for the purchases, and in May, it said it would phase out its clinical trial unit. A spokesperson at the time said the business “no longer aligned with our long-term strategic priorities,” although the company was among the first retail chains to move into the space in 2021.
The job cuts may signal that CVS is feeling pressure to reach its long-term earnings targets, Bloomberg Intelligence analyst Jonathan Palmer said. CVS’s organic strategies are likely playing out slower than expected, Palmer said, and the company is looking at all avenues to drive profit growth. Assuming each job cut saves $100,000, the reduction could add 25 to 30 cents in earnings per share, he said.
The shares fell as much as 1.2% as of noon in New York.
Rival Walgreens Boots Alliance also has been cutting jobs amid a similar move to diversify away from drugstore operations. Walgreens said in May that it planned to cut 10% of its corporate workforce, or 504 employees, to focus on its primary care strategy. A spokesperson said the job cuts were related to streamlining the business rather than financial concerns.
The Wall Street Journal first reported the CVS job cuts Monday, citing a staff memo.
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