CVS Joins Bandwagon To Save US$ 800 Million
Posted on 08/03/2023
With a staff of 300,000 “colleagues and friends,” CVS Health Corporation has noticed it has more friends than it needs, and will move to reduce headcount by 5,000. The 5,000 layoffs will take place at the corporate level, and will not impact store staffing. The Rhode Island-based store operator is well down from its 2022 highs of US$ 108 a share, at US$ 74 a share now. It has fallen much less than competitor Walgreens Boots Alliance, which dropped from US$ 85 a share to US$ 30 a share.
CVS wants to save US$ 800 million in expenses. CVS is betting its future on its plan to profitably service Medicare patients through its acquisition of Oak Street Health and Signify Health earlier this year. Discussing the most recent acquisition, CVS relayed the purchase details for an: “all-cash transaction for US$ 39 per share, representing an enterprise value of approximately US$ 10.6 billion. The company financed the transaction with borrowings of US$ 5.0 billion from a term loan agreement entered into on May 1, 2023, and existing cash and available resources. CVS Health is committed to maintaining its current credit ratings.”
