CVS Health Corp (NYSE:CVS) announced on Tuesday that it will reduce its workforce by 5,000 positions in a cost-savings move as the drugstore chain broadens its focus to include more health-care offerings.
A spokesperson said the decision is part of an initiative to reprioritize investments around care delivery and technology and reduce expenses.
The company added that none of the job losses will impact customer-facing positions in stores, pharmacies, clinics or customer services centers.
CVS has been increasing its investments into patient care with recent acquisitions that include nearly $8 billion spent on health care provider Signify Health as well as a $10.6 billion agreement to buy Oak Street Health, which operates primary care clinics for the elderly.
Corporate savings from the job cuts could add $0.25 to $0.30 in earnings per share for CVS, according to Bloomberg Intelligence analyst Jonathan Palmer.
The pharmacy chain had about 300,000 employees in the US at the end of last year and owns one of the largest health insurers in the US as well as the biggest pharmacy benefit manager.
The announcement comes just a day before CVS reports its second-quarter financial results.
Shares of CVS Health eased 1% to $73.98 in late-morning trading on Tuesday have fallen more than 20% year to date.
Contact Sean at sean@proactiveinvestors.com