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Walgreens laid off 10% of its corporate workforce, or 504 employees, on May 22, citing its increased focus on growing its healthcare business, company spokesperson Fraser Engerman confirmed to Healthcare Brew.
Engerman told Healthcare Brew the layoffs don’t affect employees at Walgreens stores, micro-fulfillment centers, or call centers. Marty Maloney, another Walgreens spokesperson, told the Chicago Sun-Times that most of the laid-off employees worked at Walgreens’ headquarters in Deerfield, Illinois, or in its Chicago office.
“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 said.
Since 2021, Walgreens executives have said they want to transform the business beyond a pharmacy chain. To do so, the company has spent roughly $13 billion to build out its US Healthcare unit, which comprises VillageMD, Shields Health Solutions, and CareCentrix—all of which Walgreens acquired in 2021 and 2022.
The company reported a $3 billion net loss for the first six months of FY 2023 compared to net earnings of $4.5 billion the same time last year. Executives cited a $5.4 billion charge for opioid-related litigation as the primary driver of the loss.
Maloney denied to the Sun-Times that the layoffs were connected to the litigation charges.
Walgreens CEO Rosalind Brewer said in a message to employees obtained by the Sun-Times that the layoffs are just one step the company is taking “to drive sustainable cost savings to help fuel investments for future growth.”
Other steps include “consolidating our Deerfield building office space, reducing consultant and contractor spending, eliminating non-essential projects, minimizing travel and canceling some events,” according to Brewer’s message.
“While difficult, these changes are necessary to streamline our business, unlock value and support our long-term growth. Together, we will continue driving toward our vision to be the leading partner in reimagining local healthcare and wellbeing for all,” Brewer told Walgreens employees.