CVS to Shed 5,000 Jobs in Cost-Cutting Push

CVS Health said it is shedding about 5,000 jobs to help reduce costs as the retail pharmacy giant sharpens its focus on healthcare services.

The company on Monday said in a statement that the jobs affected are primarily corporate positions. CVS said it doesn’t expect customer-oriented roles in stores, pharmacies and clinics will be affected in the layoff plan.

Chief Executive Karen Lynch said the changes would enable CVS to “be at the forefront of a once-in-a-generation transformation in health care,” according to a staff memo reviewed by The Wall Street Journal. 

The company is cutting down on travel expenses and its use of consultants and vendors, the memo said. It is also stopping certain business initiatives and using technology to increase productivity. Employees affected will receive severance pay, benefits and help with landing a new job elsewhere.

The Woonsocket, R.I.-based company employed over 300,000 workers primarily in the U.S. as of the end of last year, according to a securities filing.

CVS operates more than 9,000 retail locations and 1,100 walk-in clinics nationwide. It also owns one of the country’s biggest health insurers and the nation’s largest pharmacy-benefit manager.

The company is transitioning its business to play a larger role in treating patients. Earlier this summer, it closed a $10.6 billion deal for Oak Street Health, which operates primary-care clinics for the elderly. CVS completed the almost $8 billion acquisition of home-healthcare firm Signify Health in March.

The layoff announcement comes days before CVS is due to release its quarterly earnings report. The company reported revenue rose in the March quarter from the prior year, but it downgraded its financial outlook for the year due, in part, to costs to acquire and integrate recent acquisitions.

Write to Ngai Yeung at [email protected]