CVS Health is cutting approximately 5,000 jobs to save on costs amid its ongoing push into healthcare delivery.
The layoffs, first reported by The Wall Street Journal, will primarily affect corporate positions, and those affected will receive severance pay and benefits including outplacement services, the company confirmed to Fierce Healthcare. It does not expect customer-oriented roles in stores, pharmacies and clinics to be affected in the layoff plan.
"Our industry is evolving to adapt to new consumer health needs and expectations," a company spokesperson told Fierce Healthcare in a statement. "As part of an enterprise initiative to reprioritize our investments around care delivery and technology, we must take difficult steps to reduce expenses. This unfortunately includes the need to eliminate a number of non-customer facing positions across the company.
"Throughout our company’s history, we’ve continuously adapted to market dynamics to lead the industry," the statement went on. "The difficult decision we are making will set the company up for long-term success."
In addition to the layoffs, the company is cracking down on travel expenses and its use of consultants and vendors, according to a memo reviewed by the WSJ. It is also quitting some business initiatives and employing technology to boost productivity.
The company aims to reimagine the consumer healthcare experience by delivering personalized, digital solutions to reach consumers where and when they want. CVS believes its consumer-centric strategy will “drive sustainable long-term growth and deliver value for all stakeholders,” per its latest annual report.
As of Dec. 31, 2022, CVS Health had more than 300,000 employees, mostly in the U.S. in all 50 states, nearly three-quarters of whom were full-time, per the filing. It operates more than 9,000 retail locations and more than 1,100 MinuteClinics nationwide. CVS also is the parent company of major health insurer Aetna and pharmacy benefit manager CVS Caremark.
Rival Walgreens, which has similarly poured billions into healthcare investments, reportedly laid off about 10% of its corporate workforce earlier this year.
Earlier this summer, CVS Health inked a $10.6 billion deal to pick up Oak Street Health, expanding its primary care footprint. It also completed an $8 billion acquisition of home health firm Signify Health this spring. The two deals will help advance the health giant’s push into value-based care and mark its latest moves to get further into healthcare services.
CVS is expected to release its quarterly earnings report this Wednesday.