CVS to Layoff 5000 Workers in Latest Cost-Cutting Effort — Retail Bum

Pharmacy giant CVS is cutting 5,000 corporate jobs in the face of rising cost pressures.

In addition, the company is looking to cut expenses relating to its use of consultants and various vendors and pause select business initiatives not aligned with its current strategy.

All laid-off employees will be offered severance pay and benefits along with help in finding new roles, the company said.

The cost-cutting efforts come at a time when CVS is dealing with significant integration costs resulting from several recent mergers and acquisition deals, which have prompted the company to lower its annual earnings outlook even though its revenue was up 11% year on year to $85.3 billion.

In March 2023, CVS acquired home health provider Signify for $8 billion. Later, in May 2023, the company announced the completion of its $10.6 billion acquisition of Oak Street Health.

While the acquisitions were aimed at helping CVS expand into the healthcare services business and capture revenue at every stage of patients’ healthcare journeys, they came along with several other business challenges. One critical problem impacting CVS’ pharmacy benefits segment is drug makers’ removal of discount drugs from the 340B program. Another challenge is the…