CVS Health plans to lay off nearly 3,000 employees to cut costs

London
CNN
—

CVS Health plans to cut about 2,900 jobs to cut costs, the US healthcare company said on Tuesday.

“We have launched a multi-year initiative to achieve $2 billion in cost savings by cutting costs and investing in technology to improve the way we work,” a spokesman said in a statement.

The layoffs represent less than 1% of CVS Health’s (CVS) workforce.

“Affected positions are primarily company roles. The cuts will not impact frontline jobs in our stores, pharmacies and distribution centers,” the spokesperson added.

The job cuts at the company, which operates a network of pharmacies in the United States, are in addition to around 5,000 layoffs announced last year. In 2021, CVS Health announced it would close approximately 900 stores between 2022 and 2024.

“Our industry faces ongoing disruption, regulatory pressures and changing consumer needs and expectations,” the spokesman said on Tuesday.

U.S. drugstore chains are struggling with declining prescription drug reimbursement rates, according to industry analysts.

At the same time, the front end of drugstores selling snacks and household staples has become less profitable as shoppers buy those items more online at Amazon and at major chains like Walmart, Target and Costco. Dollar General’s growth has also hurt drugstore 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 robotics “to further advance automation, reduce costs and improve the experience for all of its customers,” it said its latest annual report.