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As part of a move to “further” its focus on the company’s core retail pharmacy business, Walgreens is laying off 256 employees who filled support center roles, a spokesperson confirmed to Retail Dive on Wednesday. Affected employees will receive severance pay and outplacement support, the company said.
“While decisions like these are always difficult, we believe this action is necessary to position us to rapidly respond to the changing external environment so we can best serve the millions of patients and customers who depend on us every day for their healthcare needs,” a Walgreens spokesperson said in an email. “We are grateful for the many contributions by team members who will be leaving, and we are committed to supporting them as much as possible during this transition.”
This week’s announcement is the pharmacy retailer’s latest round of job cuts over the last year. In February, the company laid off 145 people, most of whom were part of the corporate workforce. And last November, Walgreens cut 267 people, or about 5% of its corporate workforce at the time.
The cuts also follow an Oct. 15 announcement that Walgreens plans to close about 1,200 stores during the next three years. About 500 stores are slated to close during the retailer’s current fiscal year, which just began. In an October earnings call, CEO Tim Wentworth said about 6,000 of the company’s approximately 8,000 stores are profitable.
“This solid base supports our conviction in a retail pharmacy led model that is relevant to our consumers, and we intend to invest in these stores over the next several years,” Wentworth said, adding that funding for the investment will come in part from closing the underperforming locations.
For the company’s fiscal year ended Aug. 31, Walgreens reported overall sales of $148 billion and a net loss of $8.7 billion. For the company’s U.S. retail pharmacy segment, sales were $116 billion for the year. For the prior year, the company reported sales of $139 billion and a net loss of $3.1 billion.
According to a recent Numerator survey of 500 people who made a purchase at Walgreens in the past six months, if Walgreens is no longer an option, 51% of survey respondents said they are most likely to buy from other drug stores like CVS or Rite Aid; 43% said they’ll go to big box retailers like Walmart or Target; 28% said they’ll shift to grocery stores like Kroger or Publix. Club stores like Costco or Sam’s Club would capture 18% of respondents; the same percentage said they’ll shift their purchasing to dollar or discount stores.
via https://www.aiupnow.com
Nate Delesline III, Khareem Sudlow
