CVS Health announced plans Tuesday to lay off 2,900 workers in corporate positions, most of whom will be notified this week.
The cut will impact less than one percent of the U.S. health care company’s workforce in a cost-saving effort as it faces industry challenges, according to a spokesperson.
“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,” CVS Health spokesperson Ethan Slavin told NTD News in a statement.
Slavin said the layoffs are part of an ongoing multi-year initiative to save the company $2 billion by reducing expenses and investing in technology to enhance workflow.
The latest layoffs are said to help the company achieve “sustainable growth” and will impact primarily corporate positions.
Officials said front-line workers such as in-store employees, pharmacy staff, and distribution center workers will not be impacted.
According to CVS, the decision wasn’t made hastily. First, the company prioritized cost savings wherever possible, including closing open job positions.
“Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company,” the statement reads.
The company said impacted employees can expect to receive severance pay and benefits, including access to outplacement services.
The latest cuts come 14 months after the pharmacy chain announced it would slash 5,000 jobs, which were also primarily corporate positions, according to a staff memo.
Changing its business model, the company acquired two businesses last year to expand its ability to treat patients. At the end of March, CVS acquired Signify Health in a nearly $8 billion deal and closed a $10.6 billion deal to acquire Oak Street Health in May. Oak Street Health mainly operates primary care clinics for seniors.
In 2021, the company announced plans to close 900 stores over three years, the largest number of such closures for the company in recent years.
According to a second-quarter earnings report released in August, CVS saw Q2 revenues increase to $91.2 billion, up 2.6 percent from the year prior. Year-to-date cash flow was reported at $8 billion.
“We have many points of differentiation that position us to win now and into the future. Our innovation is accelerating more transparent pharmacy reimbursement models, increasing the use of biosimilars, and providing better patient outcomes through our connected health care delivery assets,” CVS Health President and CEO Karen Lynch said in an earnings news release at the time.