CVS Health to slash 5,000 jobs to save lots of costs

CVS Health is cutting 5,000 jobs to scale back costs because the retail pharmacy giant furthers its push into health-care offerings, an individual acquainted with the matter told CNBC on Tuesday.

The pharmacy chain had about 300,000 employees within the U.S. at the tip of last yr, in response to a securities filing. 

A CVS spokesperson confirmed the layoffs and said they should not expected to affect “customer-facing colleagues in our stores, pharmacies, clinics, or customer services centers.” The spokesperson added that employees laid off will receive severance pay and advantages, including access to outplacement services. 

“As a part of an enterprise initiative to reprioritize our investments around care delivery and technology, we must take difficult steps to scale back expenses,” the spokesperson said in a press release to CNBC. “This unfortunately includes the necessity to eliminate a variety of non-customer facing positions across the corporate.”

The Wall Street Journal first reported the job cuts Tuesday, citing an internal announcement to employees. It comes a day before CVS reports its second-quarter earnings. 

Rhode Island-based CVS operates greater than 9,000 retail locations and 1,100 walk-in clinics nationwide. The corporate owns considered one of the nation’s largest health insurers and the most important pharmacy profit manager, which negotiates drug discounts with manufacturers on behalf of health insurers.

But CVS has sharpened its deal with health care over the past few years, following similar moves by rivals similar to Walgreens and tech giant Amazon.

The corporate moved deeper into patient care with its nearly $8 billion acquisition of health-care provider Signify Health and $10.6 billion deal to purchase Oak Street Health, which operates primary care clinics for seniors.

CVS cut its annual earnings forecast last quarter, citing the fee of those deals.