CVS to lay off 5,000 workers

CVS Health’s CEO revealed that the company will layoff 5,000 workers in the coming weeks, according to an internal memo obtained by local east coast news group WPRI 12.

In the memo, CVS CEO Karen Lynch said the decisions were extremely difficult but necessary as CVS evolves to adapt to new consumer health needs and expectations.

“As part of an enterprise initiative to reprioritize our investments around care delivery and technology, we must take difficult steps to reduce expenses,” CVS said in a statement. “This unfortunately includes the need to eliminate a number of non-customer-facing positions across the company.

“Throughout our company’s history, we’ve continuously adapted to market dynamics to lead the industry. The difficult decision we are making will set the company up for long-term success.”

Despite first quarter financials being better than expected, CVS cut its 2023 forecast following deals finalized with primary care provider Oak Street Health and home health care provider Signify Health. 

First quarter revenues were strong in the three CVS segments that included healthcare benefits, health services, and pharmacy and consumer wellness. Total revenue in the first quarter escalated 11% vs. year-over-year to just over $85 billion.

Related:Another Ohio CVS is in trouble

CVS also had to payout in legal settlements this year, including a multistate opioid settlement with Walgreens that totaled $17.3 billion and a $6.5 million suit that accused CVS of selling baby food and formula past their expiration date.

The Woonsocket, R.I.-based company has also recently experienced some trouble at the store level. A report by the Ohio Board of Pharmacy found that eight stores in the state have been dangerously understaffed, leading to a number of customer problems. In addition, a CVS Caremark issue in early July left prescriptions unfilled for hours.