Background

CVS Health is planning to reduce costs and expand its health care offerings by cutting 5,000 jobs, according to a person familiar with the matter. The company currently has approximately 300,000 employees in the U.S.

Layoffs and Impact

The layoffs are confirmed by a CVS spokesperson, who stated that the cuts will not affect customer-facing roles in stores, pharmacies, clinics, or customer service centers. Employees who are laid off will receive severance pay, benefits, and access to outplacement services.

Reason for Layoffs

CVS states that the job cuts are part of an enterprise initiative to prioritize investments in care delivery and technology. The company aims to reduce expenses by eliminating non-customer facing positions.

Reported Job Cuts

The Wall Street Journal first reported the job cuts, which were announced internally to CVS employees. This news comes a day before CVS reports its second-quarter earnings.

CVS’s Health Care Focus

CVS, based in Rhode Island, operates numerous retail locations and walk-in clinics nationwide. The company is also one of the largest health insurers in the U.S. and owns the biggest pharmacy benefit manager. Over the past few years, CVS has been increasingly emphasizing its presence in the health care industry, following the lead of competitors like Walgreens and Amazon.

Recent Acquisitions

As part of its health care expansion, CVS acquired health care provider Signify Health and primary care clinic operator Oak Street Health for almost $8 billion and $10.6 billion, respectively. These deals have impacted CVS’s annual earnings forecast.