Walgreens has laid of hundreds of employees in two different states amid cost-cutting measures at the company that includes paring down its physical stores and reducing staff numbers amid a shift in strategy in the business.
On Monday, the company told Newsweek that it will cut nearly 650 jobs in Dayville, Connecticut, and Orlando, Florida, as it reevaluates its business.
"We are focused on aligning our operational structure to best serve our patients and customers. This includes an evaluation of our distribution center operations in order to streamline capacities to best support our stores," a company official told Newsweek in a statement.
"After a careful review, we've made the difficult decision to close our distribution centers in Dayville, Connecticut, and Orlando, Florida, resulting in the elimination of approximately 646 total roles."
Last summer, the company said that it will close 450 stores—300 in the United Kingdom and 150 in the U.S.—as part of cross-cutting measures. The company also said at the same time that there were going to institute a "restructuring" of the organization.
"We just completed an organization restructuring, which included transforming our headquarters to better align our resources with our strategic priorities. This led to the elimination of more than 500 roles, representing around 10 percent of our corporate and U.S. support office workforce," then chief financial officer James Kehoe told investors during an earnings call.
In September, the company parted ways with its then CEO Rosalind Brewer after only two and a half years. The company had been moving away from its retail pharmacy business and had turned its attention more on healthcare services.
In a statement at her departure, Brewer alluded to this shift.
"We've improved the lives of our employees, expanded healthcare services for our customers and enhanced our ability to deliver on our purpose of 'more joyful lives through better health,'" she said.
"I am confident that WBA (Walgreens Boots Alliance) is on track to be a leading consumer-centric healthcare company, serving thousands of communities across the country, especially those that need access to healthcare the most. I look forward to watching the company continue its transformation to deliver localized healthcare."
Analysts suggested that the shift into healthcare was going to be a new phase for the business.
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"The group, which previously grew through various pharmacy acquisitions, is now looking to consolidate and focus its efforts on the U.S. healthcare sector," Neil Saunders, managing director of GlobalData, told The New York Times.
In January, the company announced a net loss of $67 million in the first quarter, less than the corresponding quarter a year ago of $3.7 billion.
New CEO Tim Wentworth said the company was facing "a challenging consumer backdrop."
"We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow, with a balanced approach to capital allocation priorities," he said in a statement.
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Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
