CVS Health, a leading healthcare giant, has announced plans to cut approximately 5,000 jobs in an effort to save costs. The move comes after the company made significant acquisitions to expand into primary care.
According to a report from The Wall Street Journal, CVS has stated that the job cuts will primarily affect corporate positions and will not impact customer-oriented roles. As of the end of last year, CVS employed over 300,000 workers.
CVS did not provide immediate comments on the matter when contacted by ‘s earlier today.
Shares of CVS remained flat in premarket trading at $74.68 and have declined by 20% year-to-date.
This decision comes shortly after CVS completed the acquisition of Oak Street Health for $10.6 billion. It also follows last year’s purchase of Signify Health, a health-and-technology services provider, for approximately $8 billion.
These acquisitions are part of CVS’s strategy to expand its presence in healthcare delivery. However, they come with additional costs, as Oak Street’s business model of employing its own healthcare providers and operating its own medical centers proves to be more expensive than some competitors.
The announcement of layoffs precedes CVS’s upcoming quarterly earnings report scheduled for Wednesday. After its first quarter, CVS lowered its full-year earnings guidance, attributing it in part to the costs associated with the two acquisitions. Analysts at Mizuho Securities expect CVS to reiterate the earnings guidance but will closely monitor the company’s progress in implementing its new investments.
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