UPDATED: CVS's Board Considering Splitting Up Company - 2,900 Layoffs Announced
GoLocalProv Business Team
UPDATED: CVS's Board Considering Splitting Up Company - 2,900 Layoffs Announced
The company is headquartered in Woonsocket and is listed as one of Rhode Island’s largest private employers.
According to the Wall Street Journal, “CVS Health is conducting a strategic review of options for the company, including a possible breakup of the industry giant, according to people with knowledge of the matter. The company’s board of directors has retained bankers to facilitate the review, which has been ongoing for weeks, the people said.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“No decision by CVS is imminent, and it is possible there won’t be any major changes in the business as a result, they added. The review includes different options, including various forms a potential breakup could take, some of the people said. CVS was formed through the mergers of its namesake drugstores, pharmacy-benefit manager CVS Caremark and major health insurer Aetna. Reuters earlier reported that CVS had tapped bankers to explore options including breaking up the company," according to WSJ.
CVS’s stock is down 30% this year, and the company has had significant rounds of layoffs.
For Rhode Island, it is another potentially devastating blow. As one of the state’s other major employers, Hasbro, is actively looking to move to Boston.
Nationally, the company employs more than 300,000 people.
Regarding the WSJ story, Mike DeAngelis, Executive Director, Corporate Communications for CVS said, "CVS Health’s management team and Board of Directors are continually exploring ways to create shareholder value. We remain focused on driving performance and delivering high quality healthcare products and services enabled by our unmatched scale and integrated model."
Layoffs
DeAngelis added, "Our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance. As we previously disclosed, we’ve embarked on a multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work."
"To achieve this goal and position ourselves for sustainable growth, we will reduce our workforce by less than 1 percent - approximately 2,900 colleagues across CVS Health. Impacted positions are primarily corporate roles. The reductions will not impact front-line jobs in our stores, pharmacies, and distribution centers. Before taking this step, we prioritized finding cost savings everywhere we could, including closing open job postings. Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company," he said.
"We are committed to supporting these colleagues, who will receive severance pay and benefits, including access to outplacement services. The vast majority of impacted colleagues will be notified this week. We remain focused on our mission – continuing to provide the exceptional care and support our patients, members, clients and customers deserve and depend on," he added.
In 2023, CVS laid off 5,000 employees.
This story was first published at 9/30/24 7:14 PM.