CVS Health has confirmed plans to cut less than 1% of its total workforce, or approximately 2,900 jobs. … [+]
CVS Health has confirmed plans to cut approximately 2,900 jobs, representing less than 1% of its total workforce, as the diversified provider of medical, pharmacy services and health insurance faces cost pressures.
However, company executives declined to confirm reports that the company is considering breaking up, spinning off or selling parts of the company, which includes the large chain of CVS drug stores. Caremark is one of the nation’s largest pharmacy benefit management companies. and Aetna, the nation’s third-largest health insurance company.
“As our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, it is critical that we remain competitive and operate at peak performance,” CVS said. said in a memo to employees on Monday. “As we previously disclosed, we have embarked on a multi-year effort to realize $2 billion in cost savings by reducing expenses and investing in technology that enhances the way we work. To achieve this goal and position ourselves for sustainable growth, we will reduce approximately 2,900 employees across CVS Health by less than 1 percent.”
CVS said the jobs affected would be “primarily corporate roles” and “front-line jobs” in stores, pharmacies and distribution centers would be spared. “Before taking this action, we prioritized finding cost savings where possible, including closing open job postings,” CVS said in a statement.
This is the latest effort by CVS to improve its corporate operations. The company announced in August that CVS Health Chief Executive Officer Karen S. Lynch would take over “day-to-day management” of the company’s Aetna health insurance business following recent poor results.
Lynch successfully ran Aetna for several years before being promoted to president and CEO of CVS in 2021, and currently oversees the nation’s third-largest health insurance company. Tom Cowhey, Chief Financial Officer, CVS Health.
Reuters reported earlier this week CVS is “considering options, including a spin-off to separate its retail and insurance divisions.”
CVS said its “management and board of directors continually seek ways to create shareholder value.”
“We remain focused on improving performance and delivering high-quality healthcare products and services enabled by our unparalleled scale and integrated model,” the company added.
