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Walgreens has ended paid holidays for many of its hourly retail employees, removing a long-standing benefit that once covered major dates such as Thanksgiving, Christmas, and New Year’s Day.
The decision comes just weeks after the pharmacy giant was purchased by private equity firm Sycamore Partners in a $10billion deal.
The new policy affects thousands of full-time hourly store workers who will now only receive extra pay if they work on designated holidays.
Previously, eligible employees could receive pay for six holidays without working, provided they met tenure requirements. The change, according to several Walgreens managers interviewed by Bloomberg News, will strip hundreds of dollars annually from employees’ paychecks.
One store manager estimated she will lose more than $1,000 this year and said she plans to cut back on her family’s vacation to compensate for the loss. “It’s disappointing,” she said, requesting anonymity over fears of retaliation.
Cost-cutting drive under new ownership
Since Sycamore Partners’ acquisition, Walgreens has launched a series of cost-reduction initiatives. The company has dismissed around 80 corporate staff, including much of its communications team, and plans to shut its downtown Chicago office, according to Crain’s Chicago Business.
The removal of paid holidays follows years of financial pressure on the drugstore chain. A shift in consumer behavior - towards online shopping and discount retailers - has weakened store traffic. At the same time, insurers have lowered reimbursement rates for prescription drugs, eroding pharmacy margins. Walgreens’ stock has fallen more than 85% in the past decade, and hundreds of stores have closed.
A spokesperson for Sycamore Partners declined to comment on the changes, while Walgreens did not respond to requests for comment.
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Competitors maintain holiday pay
The policy places Walgreens at odds with industry rivals. CVS Health, for instance, the largest US pharmacy chain, continues to provide full-time store employees with seven paid holidays, including Thanksgiving, Christmas, and New Year’s Day. Staff who work those days earn time-and-a-half, the company confirmed.
For Walgreens workers hoping to offset their lost benefits, securing shifts during holidays may prove difficult. Managers told Bloomberg that not all stores remain open, and available hours are limited even for those willing to work.
Across the country, hourly pharmacy staff, such as technicians who fill prescriptions and give vaccines, earn an average of $21 per hour, according to the Bureau of Labor Statistics.
It's another difficult decision for the 123-year-old retailer as its new owners push to cut costs and restructure operations after years of declining profits in a bid to ensure its survival.
