CVS Health announced it will cut approximately 2,900 jobs, primarily affecting corporate roles, as part of a broader cost-cutting initiative aimed at saving $2 billion.
The move, representing about 1% of the company’s workforce, is in response to growing financial pressures and disruptions in the healthcare industry.
A CVS spokesperson confirmed that the job cuts will not affect front-line workers in the company’s more than 9,000 pharmacy stores, distribution centers, or pharmacies. Instead, the layoffs target corporate roles as the company continues to navigate regulatory pressures and evolving consumer expectations.
“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,” a CVS spokesperson said.
The spokesperson added that the company had already taken steps such as closing open job postings before moving forward with layoffs.
This announcement follows CVS’s latest earnings report, which highlighted financial challenges, including a 17% drop in adjusted earnings per share and a significant decline in operating income for its health services and benefits segments. The company also recently lowered its earnings forecast for the full year, reflecting ongoing difficulties in its healthcare benefits division.
CVS has been focused on enhancing operational efficiency, with CEO Karen Lynch stating in August that the company aims to streamline operations and invest in technology such as artificial intelligence and automation. The company’s broader cost-cutting measures align with this focus, as it seeks to optimize workflow while maintaining its commitment to high-quality healthcare services.
The job reductions come amid a strategic review of the company’s overall business, with some reports suggesting that CVS’s board of directors may consider splitting its retail and insurance operations. CVS acquired Aetna in 2018 for $70 billion in a bid to integrate health services and lower costs, but the merger has not fully alleviated the financial pressures the company now faces.
Employees affected by the layoffs will receive severance pay and benefits, including access to outplacement services. CVS emphasized that these decisions were difficult but necessary to remain competitive in an evolving healthcare landscape.
CBS News, USA Today, New York Post, the Street contributed to this report.
