(The Hill) — CVS Health is laying off 5,000 employees in a cost-cutting move as it shifts focus to health care services.
The Wall Street Journal reported on Monday that the layoffs will primarily affect employees who work in the corporate sector of the U.S.-based health care giant. CVS Health said that positions in the company’s stores, pharmacies, and clinics will not be affected by the new slate of layoffs.
According to a memo obtained by the Journal, CVS also plans to cut down on travel expenses and the use of consultants and vendors. The company will also put an end to certain business initiatives and uses technology to increase productivity.
Those affected by the latest layoffs will receive severance pay, benefits, and help with future employment opportunities elsewhere, according to the Journal.
CVS Health, which employs about 300,000 people, recently closed 900 chain stores in 2021 in response to the changing of “consumer buying patterns,” according to CNN.
The announcement comes days before the company was set to release its quarterly earnings report.
“Our industry is evolving 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,” a CVS Health spokesperson said in a statement to The Hill. “This unfortunately includes the need to eliminate a number of non-customer facing positions across the company.”
“We do not anticipate there will be any impact to our clients and customers as we remain focused on our mission — continuing to provide the exceptional care and support our customers, patients and communities deserve and depend on,” the spokesperson added. “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.”