CVS to lay off nearly 3,000 workers in cost-cutting drive: Here's what to know
The job cuts at the company add to the 5,000 or so layoffs last year.
LONDON -- CVS is planning to cut about 2,900 jobs in an effort to slash costs, the company said Tuesday.
"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," a spokesperson said in a statement.
The layoffs represent less than 1% of CVS Health's (CVS) workforce.
"Impacted positions are primarily corporate roles. The reductions will not impact front-line jobs in our stores, pharmacies and distribution centers," the spokesperson added.
The job cuts at the company, which runs a network of pharmacies across the United States among other businesses, add to the 5,000 or so layoffs disclosed last year. In 2021, CVS Health announced that it would close around 900 stores between 2022 and 2024.
"Our industry faces continued disruption, regulatory pressures and evolving consumer needs and expectations," the spokesperson said Tuesday.
US drug store chains are struggling because of falling reimbursement rates for prescription drugs, according to analysts who cover the industry.
At the same time, the front end of drug stores, where snacks and household staples are sold, has become less profitable as shoppers buy more of these items online from Amazon and at big-box chains such as Walmart, Target and Costco. Dollar General's growth has also hurt drug store chains in rural areas.
CVS Health, which already uses artificial intelligence in some of its businesses, is making additional investments in the increasingly popular technology, as well as in robotics, "to further automate, reduce cost and improve the experience for all of its constituents," according to its latest annual report.
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