CVS Cuts Thousands of Corporate Jobs in Shift to Healthcare

CVS Pharmacy

CVS is reportedly cutting around 5,000 jobs amid its new focus on healthcare.

The cuts are primarily centered around corporate-level positions and aren’t expected to involve jobs at the company’s stores, pharmacies or clinics, The Wall Street Journal (WSJ) reported Monday (July 31).

CVS expects the layoffs to help place the company “at the forefront of a once-in-a-generation transformation in health care,” according to a staff memo from CEO Karen Lynch reviewed by WSJ.

In addition to the job cuts, CVS is scaling back travel spending and its use of vendors and consultants, while also halting some initiatives and employing technology to boost its productivity, per the report.

PYMNTS has reached out to CVS for comment but has not yet received a reply.

News of the layoffs comes six months after CVS announced it was acquiring primary care provider Oak Street Health for $10.6 billion.

Based in Illinois, Oak Street Health employs about 600 primary care providers and operates 169 medical centers in 21 states, but it has said it plans to have more than 300 centers by 2026.

That deal followed last year’s acquisition of Signify Health, for which CVS paid $8 billion. Also in 2022, CVS debuted CVS Health Virtual Primary Care, a virtual care solution available through a digital platform.

The purchases of the two companies “significantly advance our value-based strategy by adding primary care, home-based care, and provider enablement capabilities to our platform,” Lynch said during a May earnings call.

PYMNTS research shows that consumers appreciate tech-enabled health offerings, including healthcare payments processes.

The study “Healthcare in the Digital Age: Consumers See Unified Platforms as Key to Better Health,” created in collaboration with Lynx, found that 79% of consumers want a single digital platform to manage all of their healthcare activities and pay their bills.

CVS is one of several retailers pushing into the health sector. Walmart, for example, spent part of 2022 laying the foundation for Walmart Health locations adjacent to its Walmart Supercenters, which followed its purchase of MeMD in 2021.

Walgreens is also branching into primary care through its VillageMD unit, while Dollar General earlier this year began a rural healthcare project.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.