Dive Brief:
- Walgreens Boots Alliance is cutting its corporate workforce by 10%, affecting 504 workers, as the company focuses on its healthcare business.
- According to Walgreens spokesman Fraser Engerman, the layoffs won’t include the company’s stores, micro-fulfillment centers or call centers.
- “As we continue to transform our business into a consumer-centric healthcare company, we are focused on aligning our structure and streamlining our operations to best serve our patients and customers,” Engerman wrote to Healthcare Dive.
Dive Insight:
Walgreens reported a $3 billion net loss for the first six months of its fiscal 2023 compared with net earnings of $4.5 billion in the same period last year. The chain said the decline was largely driven by a $5.4 billion after-tax charge for opioid claims and litigation.
Last week, Walgreens reached a $230 million settlement with San Francisco for its role in the city’s opioid epidemic, though the company did not admit fault.
According to a letter from CEO Roz Brewer obtained by the Chicago Sun-Times, Walgreens is taking steps to save costs — including consolidating office space, cutting non-essential projects and minimizing travel — “to help fuel investments for future growth.”
Walgreens had been steadily expanding its healthcare offerings, competing against other retailers like CVS and Walmart that are also homing in on the space.
VillageMD, a primary care provider majority owned by Walgreens, acquired a Connecticut medical group in March and completed its purchase of Summit Health, the parent company of CityMD, early this year. Walgreens also bought the remaining stake in post-acute and home care services provider CareCentrix in October.
The pharmacy chain posted net earnings of $703 million in its second quarter ended Feb. 28 compared with $883 million in the prior-year period. Walgreens’ healthcare unit bolstered the company’s finances in the quarter, allowing the company to beat Wall Street expectations even with the decline in profits.
