CVS layoffs will hit nearly 3,000 as it considers Aetna separation

CVS Health Corporation (CVS) is preparing to cut about 2,900 jobs as part of a multi-year, $2 billion cost-savings initiative aimed at reducing expenses and increasing investment in technology.

“To achieve this goal and position ourselves for sustainable growth, we will reduce our workforce by less than 1% — approximately 2,900 CVS Health colleagues,” a company spokesperson told Quartz in a statement sent by email.

The spokesperson added that the affected positions will primarily be corporate roles and will not affect front-line jobs in the company’s stores, pharmacies and distribution centers. Employees affected by the layoffs will be notified this week and will receive severance and benefits.

The news comes as the company is reportedly conducting a strategic review of its operations, which includes a possible split between its retail and insurance businesses. Bloomberg reportedciting a person familiar with the matter.

“CVS Health’s management team and Board of Directors are continually exploring ways to create shareholder value,” the spokesperson said of the review.

The healthcare conglomerate includes drugstore chain CVS, insurer Aetna and pharmacy benefit manager (PBM) CVS Caremark.

The company is facing increasing challenges from rising operating costs at its pharmacy chain and rising medical expenses at its Aetna health insurance division.

The The Wall Street Journal reported that CVS executives will meet with Glenview Capital Management this week to discuss strategies to improve operations in response to a drop in stock value.

The company’s share price is down more than 22% since the start of the year.

In August, CVS announced that the head of its insurance business was leaving the health care giant as its health benefits unit spun off the rest of the company in the second quarter of 2024.

During a call to investors, CVS CEO Karen Lynch broke the news that she would replaces former Aetna president Brian Kanewho assumed the role just last year.

Lynch also announced that CVS is planning a multi-year, $2 billion cost-savings initiative that is based, in part, on accelerating the adoption you.

“These savings will be driven by further streamlining and optimizing our operations and processes, continuing to streamline our business portfolio and accelerating the use of artificial intelligence and automation across the enterprise as we consolidate and integrate platforms,” ​​Lynch said at the time .