CVS Health to lay off 5,000 employees

CVS Health will lay off 5,000 workers. The pharmaceutical chain announced that, in an attempt to reduce the company's costs, it will lay off 5,000 of its 300,000 employees. This will primarily affect corporate positions while customer-facing positions in stores, pharmacies and clinics will not be impacted.

That's not the only thing the company is doing to cut costs. The Wall Street Journal reported that the pharmaceutical chain also plans to reduce its budget spent on business travel as well as the use of consultants and suppliers.

In addition, they will suspend some commercial initiatives and are considering using technology to increase employee productivity. CEO Karen Lynch explained in the memo that these modifications will allow CVS Health "be at the forefront of a once-in-a-generation transformation in health care."

Employees who lose their jobs, however, will not leave empty-handed. According to CVS Health management, the laid-off workers will be compensated and will receive both benefits and assistance from the company to help them in their search for work elsewhere.

CVS Health is reinventing itself

One of the reasons for the layoffs is that CVS Health has been focusing its labor activity on healthcare services for the past few months. The company recently closed a deal with Oak Street Health, which runs primary care clinics for the elderly.

That is not the only thing that the company has. The WSJ reported that CVS has more than 9,000 retail stores and 1,100 walk-in clinics nationwide. It also owns one of the country's largest health insurers and the nation's largest pharmacy-benefit manager.