CVS Health To Cut 2,900 Jobs But Mum On Potential Break-up

CVS Health confirmed plans to pare about 2,900 jobs, or less than 1% of its total workforce, as the diversified provider of medical care, pharmacy services and health insurance faces cost pressures.

Company executives, however, wouldn’t confirm reports they were considering breaking up, spinning off or selling parts of the company, which includes the large chain of CVS drugstores; Caremark, one of the nation’s largest pharmacy benefit management companies; and Aetna, the nation’s third largest health insurance company.

“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,” CVS said in a memo to employees Monday. “As we 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. To achieve this goal and position ourselves for sustainable growth, we will reduce our workforce by less than 1 percent – approximately 2,900 colleagues across CVS Health.”

CVS said the positions impacted are “primarily corporate roles” while “front-line jobs” in stores, pharmacies and distribution centers would be spared. “Before taking this step, we prioritized finding cost savings everywhere we could, including closing open job postings,” CVS said.

It’s the latest effort by CVS to make improvements in company operations. In August, the company said CVS Health chief executive Karen S. Lynch would take over “day-to-day management” of the company’s Aetna health insurance business after its latest poor performance.

Lynch, who successfully ran Aetna for several years before she was promoted to become CVS president and chief executive in 2021, is overseeing the nation’s third-largest health insurer with CVS Health chief financial officer Tom Cowhey.

Earlier this week, Reuters reported that CVS is “exploring options that could include a break-up of the company to separate its retail and insurance units.”

For its part, CVS said the company’s “management team and Board of Directors are continually exploring ways to create shareholder value.”

“We remain focused on driving performance and delivering high quality healthcare products and services enabled by our unmatched scale and integrated model,” the company added.