CVS Pharmacy Layoffs 2017
CVS Pharmacy Inc. filed two WARN notices earlier this month, in relation to the permanent layoffs of 78 employees.
The company filed a WARN notice with the Pennsylvania Department of Labor and Industry, indicating that 51 people at its office in East Northport, New York will face layoffs on December 15. CVS Pharmacy also filed a WARN notice with the New York State Department of Labor, saying that 27 jobs will be cut from its pharmacy and retail store in Long Island on January 12, 2018. The company cited economic reasons as the motive for the layoffs.
CVS Pharmacy, the largest pharmacy chain in the U.S., is a subsidiary of the American retail and healthcare company CVS Health Corp. (NYSE:CVS). CVS Health operates more than 9,700 retail locations in the United States and Brazil. the company also operates 35 specialty pharmacies and more than 1,100 “MinuteClinic” locations.
CVS Pharmacy Laid Off 99 in Rockland County
Layoffs are not an uncommon event at CVS Pharmacy. In March, the company said it was laying off 99 employees at its Rockland County location. Managment cited economic factors as the reason for the terminations. The affected workers were not represented by a union, but they were eligible for severance benefits and were encouraged to apply for other CVS Health positions that were open in the area.
Job cuts have been pretty commonplace at CVS Pharmacies since CVS Health acquired the pharmacy services provider Omnicare, Inc. (NYSE:OCR) for approximately $12.7 billion in 2015. While CVS said the merger was synergistic, acquisitions such as this are typically followed by layoffs. Just days after closing the sale, CVS announced that it was laying off 232 workers, which was 40% of its downtown Cincinnati workforce.
“As part of the integration of our two businesses, we have identified some overlap of corporate functions between the two organizations. As a result, a number of Omnicare corporate employees based in Cincinnati, Ohio will be released over the next several months,” said Mike DeAngelis, a CVS Health spokesman.
In response to changing market and economic conditions, the layoffs continued. In November 2016, CVS said it was laying off 600 employees from its various headquarters. The layoffs, which primarily affected those in Illinois, Arizona, and Rhode Island, were applied across the board, from entry-level positions to top executives.
Speaking at an analyst day event in December 2016, executives outlined their long-term growth strategy, which included closing 70 stores in early 2017. CEO Larry Merlo said that 2017 would be “a rebuilding year” and that CVS “won’t be satisfied until the company returns to sustainable, healthy earnings growth.”
That may take a while. CVS has been losing foot traffic in its pharmacy and retail locations since it decided to stop selling tobacco products three years ago. The company is ramping up its beauty and health product offerings, but that hasn’t replaced the lost tobacco sales revenue. What’s more, CVS is losing market share to rivals like Walgreens Boots Alliance Inc (NASDAQ:WBA) and Target Corporation (NYSE:TGT), which have been improving their own health and beauty areas.
CVS Health Corp’s rebuilding might extend well beyond 2017, which will most likely include additional layoffs.
“October 2017 WARN Notice,” Pennsylvania Department of Labor, last accessed October 24, 2017.
“WARN Details,” New York State Department of Labor, October 5, 2017.
“CVS Health at a Glance,” CVS Health Corp., last accessed October 24, 2017.
“CVS to lay off 99 workers in Rockland,”LoHud, March 6, 2017.
“CVS Health and Omnicare Sign Definitive Agreement for CVS Health to Acquire Omnicare,” CVS Health, May 21, 2015.
“CVS slashes 232 Omnicare jobs,” USA Today, August 28, 2015.
“Massive Layoffs Planned at CVS Health,” Retail Information System, November 4, 2016.
“WARN Act Notice to ODJFS,” CVS Health Corp., August 25, 2017.
“CVS Health Reports First Quarter Results; Confirms 2017 EPS Guidance,” CVS Health Corp., May 2, 2017.