Walgreens is set to layoff more than 500 workers – 10 percent of its corporate workforce
Walgreens Boots Alliance is to layoff 504 corporate employees as financial obligations for opioid litigation and other legal matters pile up.
Earlier this month, the drugstore giant settled a lawsuit with the city of San Francisco, agreeing to pay it $230 million over its sales of opioids that have contributed to the Bay Area city’s drug crisis.
Most of the cuts will be made at the drugstore giant’s Deerfield, Illinois headquarters or its Chicago office.
The layoffs represent about 10 percent of the company’s corporate workforce.
Walgreens Boots Alliance employs over 325,000, according to the company’s latest quarterly earnings report.
‘None of these roles are based at our stores, microfulfillment centers or call centers. We’re grateful for the many contributions by the team members who will be leaving our organization, and are committed to supporting them as much as possible during this transition,’ Spokesman Marty Maloney said.
Walgreens said it plans to slash its corporate staff by about 10%, as it streamlines operations and focuses on consumer-facing healthcare businesses
Walgreens stock has fallen almost 20% so far this year.
Maloney denied that the layoffs were connected to the company’s financial liabilities.
The company said during its March earnings report that it had paid out $5.4 billion for opioid-related legal claims.
While making the settlements, the company has denied any liability regarding allegations of its role in the opioid crisis.
Walgreens has recently moved beyond its drugstores to become a direct provider of medical care through the Walgreens-backed VillageMD, which bought Summit Health. The company contributed $3.5 billion towards the purchase.
The transaction, valued at $8.9 billion, also involved investment from Cigna’s Evernorth.
Last week, Walgreens disputed in a federal court a $642 million arbitration award for health insurance provider Humana in a fight over drug prices. Walgreens called the sum ‘staggering.’
None of the 504 roles being cut are based at its stores, micro-fulfillment outlets or call centers, a company spokesperson said.
CEO Rosalind Brewer said in a message to employees being laid off obtained by the Chicago Sun-Times, the layoffs were among a series of steps the company is taking ‘to drive sustainable cost savings to help fuel investments for future growth.’
Brewer did not make any reference to legal issues the company is facing.
Brewer thanked workers for their contributions stating: ‘While difficult, these changes are necessary to streamline our business, unlock value and support our long-term growth. Together, we will continue driving towards our vision to be the leading partner in reimagining local healthcare and wellbeing for all.’
The laid-off workers will have counseling and mental health services available at the company. Workers with at least three years of service are getting severance of two weeks per year.
Maloney said all affected employees will have outplacement support.
Postings at the blog TheLayoff said workers with at least three years of service were getting severance of two weeks per year.
San Francisco’s reputation as a coastal gem has been left in tatters by worsening crime, drugs, and homelessness rates, even as it remains home to tech billionaires.
Addicts openly smoke drugs on the sidewalks of the Tenderloin area of San Francisco, where overdose deaths have rocketed upward in recent months.
San Francisco saw a staggering 41 percent surge in the number of drug-related deaths in the first quarter of 2023.
The settlement with San Francisco came nine months after US District Judge Charles Breyer in San Francisco said the drugstore chain could be held liable for having “substantially contributed” to an opioid epidemic that caused “widespread harm” in the city and constituted a public nuisance.
Breyer faulted Walgreens for its “15-year failure” to properly scrutinize opioid prescriptions and flag possible misuse of the sometimes highly addictive drugs.
San Francisco City Attorney David Chiu called Walgreens’ settlement the largest awarded to a local government in years of opioid litigation nationwide.
He said Walgreens’ actions ‘made the opioid epidemic in San Francisco worse than it otherwise would have been,’ and that there is ‘no amount of money that will bring back the lives we have lost.’
In a statement, Walgreens said it “disputes liability” but did not admit fault, but that settling allows it to focus on patients, customers and communities. ‘Our thoughts are with those impacted by this tragic crisis,’ it added.
This graphic shows the rise in positive urine tests for fentanyl of those receiving drug abuse treatment in different parts of the US. Millennium Health’s data is based on some 4.5 million samples.
What is fentanyl and why is it so dangerous?
Fentanyl was originally developed in Belgium in the 1950s to aid cancer patients with their pain management.
Given its extreme potency it has become popular among recreational drug users.
Overdose deaths linked to synthetic opioids like fentanyl jumped from nearly 10,000 in 2015 to nearly 20,000 in 2016 — surpassing common opioid painkillers and heroin for the first time.
And drug overdoses killed more than 72,000 people in the US in 2017 – a record driven by fentanyl.
It is often added to heroin because it creates the same high as the drug, with the effects biologically identical. But it can be up to 50 times more potent than heroin, according to officials in the US.
In the US, fentanyl is classified as a schedule II drug – indicating it has some medical use but it has a strong potential to be abused and can create psychological and physical dependence.