Walgreens Boots Alliance, facing a pileup of financial obligations for opioid litigation and other legal matters, is laying off 504 corporate employees.
Spokesman Marty Maloney confirmed the layoffs Thursday, saying most of the cuts will be at the drugstore giant’s Deerfield headquarters or its Chicago office. He said the layoffs represent about 10% of its corporate workforce.
“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,” Maloney said.
He denied that the layoffs are connected to the company’s financial liabilities. It reported a $5.4 billion after-tax charge to cover opioid claims and litigation for the six months ending Feb. 28. In its settlements, the company has denied liability in regards to allegations of its role in the opioid crisis.
Earlier this month, it settled with San Francisco, agreeing to pay the city $230 million over its sales of opioids.
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.”
CEO Rosalind Brewer said in a message to employees, obtained by the Sun-Times, that the layoffs are among a series of steps the company is taking “to drive sustainable cost savings to help fuel investments for future growth.” Brewer made no reference to legal matters.
She cited other cost-saving measures Walgreens has implemented, such as “consolidating our Deerfield building office space, reducing consultant and contractor spending, eliminating non-essential projects, minimizing travel and canceling some events.”
She thanked the workers for their contributions and said, “While difficult, these changes are necessary to streamline our business, unlock value and support our long-term growth. Together, we will continue driving toward our vision to be the leading partner in reimagining local healthcare and wellbeing for all.”
Walgreens has evolved beyond its drugstores to become a direct provider of medical care through the Walgreens-backed VillageMD, which bought Summit Health.
Brewer said laid-off workers will have counseling and mental health services available at the company.
Maloney verified Brewer’s memo as authentic. He said Walgreens is committed to keeping offices in Deerfield and Chicago.
Maloney said all affected employees will have outplacement support. He said severance is being offered but declined to share terms. Postings at the blog TheLayoff.com said workers with at least three years of service were getting severance of two weeks per year.