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CVS Health to slash 5,000 jobs to save costs

HealthCVS Health to slash 5,000 jobs to save costs

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A woman walks past a CVS Pharmacy in Washington, DC, on November 2, 2022.

Brendan Smialowski | AFP | Getty Images

CVS Health is cutting 5,000 jobs to reduce costs as the retail pharmacy giant furthers its push into health care offerings, a person familiar with the matter told CNBC on Tuesday.

The pharmacy chain had about 300,000 employees in the U.S. at the end of last year, according to a securities filing. 

A CVS spokesperson confirmed the layoffs and said they are not expected to impact “customer-facing colleagues in our stores, pharmacies, clinics, or customer services centers.” The spokesperson added that employees laid off will receive severance pay and benefits, including access to outplacement services. 

“As part of an enterprise initiative to reprioritize our investments around care delivery and technology, we must take difficult steps to reduce expenses,” the spokesperson said in a statement to CNBC. “This unfortunately includes the need to eliminate a number of non-customer facing positions across the company.”

The Wall Street Journal first reported the job cuts Tuesday, citing an internal announcement to employees. It comes a day before CVS reports its second-quarter earnings. 

Rhode Island-based CVS operates more than 9,000 retail locations and 1,100 walk-in clinics nationwide. The company owns one of the nation’s largest health insurers and the biggest pharmacy benefit manager, which negotiates drug discounts with manufacturers on behalf of health insurers.

But CVS has sharpened its focus on health care over the past few years, following similar moves by rivals like Walgreens and tech giant Amazon.

The company moved deeper into patient care with its nearly $8 billion acquisition of health care provider Signify Health and $10.6 billion deal to buy Oak Street Health, which operates primary care clinics for the elderly.

See also  Medicare will allow pharma firms to discuss drug price negotiations

CVS cut its annual earnings forecast last quarter, citing the cost of those deals.

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