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Drug retail giant CVS Health has confirmed plans for a significant number of layoffs as part of a broader cost-saving initiative.
The Rhode Island-based pharmacy chain will eliminate approximately 2,900 positions nationwide, representing 1% of its total workforce. The restructuring primarily targets corporate roles, leaving front-line positions in stores, pharmacies, and distribution centres unaffected.
Mike DeAngelis, a CVS spokesperson, cited "continued disruption, regulatory pressures and evolving consumer needs" as key factors driving the decision. He emphasized the company's need to "remain competitive and operate at peak performance" in the face of ongoing business challenges.
“Before taking this step, we prioritized finding cost-saving everywhere we could, including closing open job postings,” DeAngelis explained. “Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company.
Layoffs come as part of cost-saving strategy
The layoffs form part of a $2 billion cost-saving strategy, which also includes investments in technology to enhance operational efficiency.
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In compliance with the Worker Adjustment and Retraining Notification (WARN) Act, CVS plans to file the required notice in Rhode Island next week. The federal law mandates that large employers provide 60 days' advance notice of significant layoffs or facility closures.
Affected employees, most of whom will be notified this week, will receive severance pay and benefits, including access to outplacement services. DeAngelis stressed that the layoffs are company-wide and not concentrated in a single corporate office.
The restructuring follows a larger workforce reduction implemented by CVS Health last year, which saw 5,000 positions eliminated. The company maintains its commitment to its core mission of providing care and support to patients, members, clients, and customers despite these organizational changes.
The move reflects the ongoing challenges faced by large healthcare corporations in balancing operational costs with evolving market demands and regulatory landscape.
Job cuts come amid complaints over low wages & poor working conditions
It comes as more than 7,000 employees at CVS pharmacy locations across California cast strike votes citing complaints about inadequate wages and the high cost of healthcare benefits.
The dispute between CVS and the union remains unresolved as their previous contract expired at the end of June 2024. Despite CVS’s position as a healthcare giant, the average store clerk earns less than $20 an hour, and workers are pushing for better healthcare options, enhanced staffing, and safety measures.
Employees have voiced frustration not just over financial compensation, but also over difficult working conditions. According to one worker, the company seems unwilling to address many of the store-level challenges that staff face daily, such as theft and safety concerns.
