WOONSOCKET – CVS Health Corp. on Tuesday confirmed plans to lay off 5,000 employees nationwide in an effort to reduce expenses.
CVS Executive Director of Corporate Communications Mike DeAngelis told Providence Business News the company is planning to eliminate a number of noncustomer-facing positions “as part of an enterprise initiative to reprioritize our investments around care delivery and technology.” He would not say whether any Rhode Island-based employees will be affected.
A Simplified Approach to Designing and Implementing Internal Control in the Hospitality Industry
In my previous article, Internal Controls & Audits: Keys to a Resilient Hospitality Business, I…
Learn More
Employees learned of the planned job cuts in an internal memo from CVS Health CEO Karen Lynch on Monday, according to media reports.
“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,” DeAngelis said. “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.”
DeAngelis said the layoffs will impact primarily corporate positions, though the company did not identify the states where the job cuts will occur. He also added laid off workers would receive severance pay and benefits, including access to outplacement services.
The company now employs 300,000 across the U.S., including 8,600 at its headquarters in Woonsocket, according to PBN’s 2023 Book of Lists. CVS runs a drugstore chain with nearly 10,000 locations. It manages prescription drug plans for big clients, such as insurers and employers, and it provides coverage for more than 25 million people through its Aetna arm.
“The decisions on which positions to eliminate were extremely difficult, but they were made with care and consideration,” according to WPRI-TV CBS 12 who obtained a copy of the memo. “We will do everything we can to support those affected.”
The layoff announcement comes after CVS Health completed a roughly $10.6 billion acquisition of primary care provider Oak Street Health on May 3. CVS paid $39 per share in cash for each share of Oak Street. CVS financed the transaction with the borrowing of $5 billion from a term loan agreement entered into on May 1 and existing cash and available resources.
Oak Street Health is a Medicare-based primary care provider with 169 centers across the country that provide care for more than 159,000 patients. The company has four locations in Rhode Island – two in Providence, one in Warwick and one in Woonsocket.
Oak Street Health will continue to operate as a multipayer primary care provider as part of CVS Health.
CVS Health also closed an approximately $8 billion deal in March to buy home health care provider Signify Health.
On June 7, CVS Health was 1 of 4 Rhode Island companies that made the 2023 Fortune 500 list. CVS was ranked sixth, after taking the fourth spot in 2022. The company, which was listed with $322.5 billion in annual revenue, was the highest-ranked enterprise in Rhode Island.
In addition, Lynch was featured in a cover photo and story in the June-July edition of Fortune that contains the 500 list.
CVS will announce its second quarter earnings on Wednesday before the markets open. CVS turned in a better-than-expected first quarter, as revenue grew from all parts of its business. But the health care giant chopped 2023 earnings projections after closing a pair of multibillion dollar deals that push it deeper into providing care.
The company’s total revenue jumped 11% to $85.3 billion in the first quarter. Adjusted earnings totaled $2.20 per share.
