CVS Health is set to lay off more than 630 employees as part of a $2 billion cost-cutting initiative aimed at improving financial performance, The Boston Globe reported Oct. 7.
According to a WARN notice sent to state officials, the layoffs will begin Dec. 8 and comprise 632 positions, including roles in technology, human resources and analysis. Of those affected, only 153 employees are based in Woonsocket, R.I., while the other 479 are remote employees reporting to Woonsocket leaders.
These layoffs follow a previous round of reductions, with CVS having laid off around 2,900 employees at the end of September. The current cuts represent 1% of the total workforce and will not impact frontline roles in retail stores and pharmacies.
The layoffs also coincide with CVS' plans to change its approach to Medicare Advantage plans next year, reflecting the company's strategy of adapting to evolving market demands and regulatory pressures.
In addition, the CVS board is considering a potential breakup of the company, which could separate its pharmacy operations from its insurance business, unwinding its $69 billion acquisition of Aetna.
In an email shared with Becker's Oct. 8, a CVS spokesperson stated, "Our industry faces continued disruption, regulatory pressures and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance. As we've previously disclosed, 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."
CVS also told Becker's the vast majority of impacted colleagues were notified last week and will receive severance pay and benefits, including access to outplacement services.