Walgreens plans to close its e-commerce distribution center in Illinois and lay off up to 400 workers. The pharmacy chain announced a month earlier that it would cut more than 500 corporate positions in Illinois. Since then, it has worked to “convert its business into a consumer-centric healthcare company.”
“The layoffs would not affect Walgreens’ call centers, micro-fulfillment facilities, and retail locations.” This is said by the company’s spokesperson, Fraser Engerman.
In the U.S., Walgreen Co. (Walgreen) and its subsidiaries run a chain of pharmacies. The company offers its clients access to consumer goods and services through many channels. Services for wellness, health, and pharmacies are included in this across communities in America. Walgreens provides its goods and services through drugstores, mail, phone, and online. Let us learn about the layoffs at Walgreens in this article.
About the company
The second-largest network of drugstores in the country, behind CVS Health, is run by a U.S. business called Walgreens. It focuses on providing photo services, health and wellness products, and prescription filling. It was established in Chicago in 1901 and is based in the Chicago suburb of Deerfield, Illinois.
A leader in retail pharmacy worldwide, Walgreens is a part of the Retail Pharmacy USA Division of Walgreens Boots Alliance, Inc. Walgreens’ mission is to promote the health and wellness of every community in America. It is the nation’s favorite drugstore, health, and beauty brand.
Walgreens is thrilled to be a neighborhood health destination serving around 8 million people daily. It is proud to operate over 9,000 retail stores across America, Puerto Rico, and the U.S. Virgin Islands.
Walgreens pharmacists play an important part in the U.S. healthcare system. They offer a wide range of pharmacy and healthcare services.
Walgreens provides a true omnichannel experience with platforms fusing physical and digital. It is powered by cutting-edge technology. This is to deliver high-quality goods and services to regional communities nationwide. It aims to meet the needs of consumers and patients better.
What happened to the business?
For the first half of fiscal 2023, Walgreens reported a $3 billion net loss. It is down because it had $4.5 billion in net income during the same period in 2022. The chain said a $5.4 billion after-tax expense for opioid claims and lawsuits was a major factor in the fall.
Walgreens did not admit guilt in the $230 million settlement it struck in May 2023 with San Francisco. It happened because of its contribution to the city’s drug issue.
The Chicago-based reporter got a statement from Walgreens CEO Roz Brewer stating that the company is saving money. It will consolidate office space, drop unneeded projects, and reduce travel. This is “to help fuel expenditures for future progress.”
Other retailers, including CVS and Walmart, focus on the healthcare market. Hence, Walgreens has been progressively increasing its healthcare products.
Walgreens owns the majority of primary care provider VillageMD. In March, it purchased a medical group in Connecticut. Early this year, it finished buying Summit Health, the parent organization of CityMD. In October 2022, Walgreens also acquired the last remaining shares of CareCentrix, a supplier of post-acute and home care services.
In its second quarter, which concluded on February 28, the pharmacy chain reported net earnings of $703 million. It was down from $883 million in the same period last year. Despite the drop in profits, Walgreens’ healthcare division boosted the business’s finances in the quarter. This enabled the company to surpass Wall Street projections.
Why does Walgreens lay off employees?
Walgreens is making another wave of layoffs. The business is committed to sticking to the plan it claims for its most recent transformation.
According to Crain’s Chicago Business, Walgreens Boots Alliance will close its e-commerce distribution center in Edwardsville, Illinois. This would result in the loss of roughly 400 employees. This was announced shortly after it was revealed that the business would close 150 locations this year.
Additionally, Walgreens announced in May that it would remove more than 500 corporate-level positions.
According to Walgreens, the business is implementing a plan as it emphasizes patient healthcare more. In a statement, the company from Northbrook, Illinois, claimed that the recent layoffs would “change [the] business into a consumer-centric healthcare organization.”
Additionally, Walgreens announced that it would reevaluate how it sends orders to customers’ and patients’ homes through its network of stores.
As a result, Walgreens stated, “We have made the hard choice to close our e-commerce distribution center in Edwardsville, Illinois, later this summer.” “We are dedicated to supporting our team members during the change. We are grateful for all that they have done to this facility.”
At the Edwardsville site, 393 positions will be eliminated. On August 28, that center will formally close.
Conclusion
The Q1 earnings report for Walgreens Boots Alliance could have been more impressive. The poorer respiratory season, persistent economic difficulties, lower-than-expected COVID-19 booster doses, and testing contributed to the quarter’s decline. Walgreens reduced its adjusted EPS outlook for the full year from $4.45 to $4.65 to $4.00 to $4.05. The business’s adjusted operating income has decreased by approximately 26% to $3.2 billion on a constant currency basis.
The third quarter saw a $113 million loss in the healthcare segment. It includes a greater focus on patient care at primary-care provider VillageMD and urgent care provider Summit Health. This loss was due to the expense of VillageMD’s expansion (93 more clinics have been added year over year). Also, a drop in visits at Summit Health caused this. The respiratory season was lower than usual, preventing Summit Health from expanding.
