CVS Health to Cut 5,000 Jobs
CVS Health is set to cut 5,000 jobs to reduce costs after significant acquisitions. Corporate roles are affected, while customer-oriented roles remain unaffected. CVS's stock prices have decreased 20% this year.
CVS Health, a leading healthcare giant, is set to cut approximately 5,000 jobs in an effort to reduce costs following recent significant acquisitions aimed at expanding its primary care services.
According to The Wall Street Journal, the majority of the positions affected are corporate roles, while customer-oriented roles are expected to remain unaffected, as stated in a company press release. CVS Health currently employs over 300,000 workers as of the end of last year.
As of now, CVS Health has not responded to a request for comment.
CVS stock prices remained stagnant at $74.68 during premarket trading and have experienced a 20% decrease this year so far.
This decision comes shortly after CVS completed its $10.6 billion acquisition of Oak Street Health and its acquisition of health-and-technology services provider Signify Health for approximately $8 billion last year.
These acquisitions are part of CVS's strategic expansion in the healthcare delivery sector. Despite their benefits, they also come with additional costs, as Oak Street's business model, involving the employment of its own healthcare providers and the opening of medical centers, is more expensive compared to some competitors.
The announcement of these job cuts precedes CVS's quarterly earnings report scheduled for Wednesday. Following the first quarter, CVS reduced its full-year earnings guidance, citing costs associated with the acquisitions. In anticipation of the earnings report, analysts at Mizuho Securities expect CVS to reiterate the earnings guidance while focusing on its progress in leveraging these new investments.