CVS to cut more than 630 jobs based at its Rhode Island headquarters – The Boston Globe

Companies are required by federal law to notify the government of mass layoffs at least 60 days in advance.

Laid off positions include analysts, brokers, software engineers, directors, associates in technology and human resources, and others, according to a breakdown of cut jobs provided to the state by CVS, which was obtained by the Globe.

At least 70 of the terminated employees are listed as living in Rhode Island, according to the company’s letter to the state, while the rest are scattered across the country.

Layoffs will begin on Dec. 8. Employees who will be laid off will receive severance pay and benefits.

The layoffs are part of a $2 billion cost-cutting plan designed to improve the company’s financial performance. The reductions will be companywide; “not isolated to a single corporate office or state,” said company spokesman Michael J. DeAngelis in a statement to the Globe, and amount to less than 1 percent of the company’s headcount.

Approximately 2,900 employees will be laid off at CVS in total, which will primarily impact those in corporate roles. Front-line jobs in CVS’s retail stores, pharmacies, and distribution centers will not be impacted by the reductions, according to DeAngelis.

“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,” said DeAngelis, who said the company has closed open job postings as part of their cost-savings efforts.

The news comes just days after Reuters reported that the company is considering splitting its pharmacy chain and its insurance business. The report details how CVS could effectively undo its $69 billion acquisition of insurance company Aetna, which today generates roughly one-third of the company’s revenue. CVS’s board is considering spinning out two publicly traded companies.

Aetna, which has long been headquartered in Hartford, Conn., since its founding in 1853, was expected to remain in Hartford for at least a decade after the 2018 acquisition. It’s unclear how many layoffs will impact Connecticut this year, but when the company cut 5,000 jobs in 2023, more than 330 directly impacted Hartford.

On Monday, CVS executives met with investor Glenview Capital Management on how to improve operations after a long drop in share value. Glenview’s founder Larry Robbins has “established a large position in CVS,” the Wall Street Journal reported, and the company accounts for approximately $700 million of the hedge fund’s $2.5 billion portfolio. A spokesperson for Glenview said the hedge fund is not pushing for a breakup of CVS.

CVS has been immersed in its plans to fulfill its long-term vision of transforming itself from a business that simply charges a fee for service into a “value-based” health care provider. That model requires using technology, including electronic medical records, to coordinate care between pharmacists, doctors, nurses, and hospitals. That transformation requires considerable capital and reorganization.

While facing industry-wide financial challenges, CVS has tried to fulfill its vision of creating “entirely new health care concept,” which is a one-stop provider that includes its existing drugstores; its in-store primary care clinics; Caremark, the largest pharmacy benefits manager in the country; and an insurance arm that allows the company to help set prices.

In its efforts to grow, CVS spent billions to purchase Oak Street Health, a senior-focused chain of health care clinics, and Signify Health, a home care provider.

Caremark has been the company’s most reliable arm in recent years, but is facing scrutiny from the Federal Trade Commission, which is accusing the company of driving up the cost of drugs.

In late 2021, executives announced a plan to close 900 stores in three years in order to expand primary care services. The company is in the middle of its third year of that “strategic closure.”

“We remain focused on our mission — continuing to provide the exceptional care and support our patients, members, clients and customers deserve and depend on,” said DeDeAngelis.

Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her @alexagagosz and on Instagram @AlexaGagosz.