An essential retailer now announces painful layoffs as it aims to cut costs and “focus on other company priorities”.
Walgreens is cutting 5% of its corporate staff, which will equate to a whopping 267 jobs.
A Walgreen spokesperson says the job cuts are necessary in order to “streamline our operations and focus on our critical priorities.”
“None of these roles are based at our stores,” they said.
“These latest cuts follow a 10% reduction in Walgreens’ corporate workforce in May 2023,” reports RetailTouchPoints.
The essential retailer has faced a few challenges and bumps on the road, including:
- Paying a $230 billion settlement in May 2023 with the city of San Francisco over the retailer’s role in the opioid epidemic;
- In June 2023 Walgreens announced plans to close 150 U.S. stores and 300 Boots stores in the UK as part of cost-cutting efforts;
- Then-CEO Rosalind Brewer stepped down in September, replaced by Tim Wentworth in October; and
- WBA agreed in October 2023 to a $192.5 million settlement of a class-action lawsuit brought by shareholders claiming they were misled regarding Walgreens’ failed 2015 merger with Rite Aid.
Despite achieving sales of $139.1 billion, a 4.8% increase compared to the previous year, WBA had a net loss of $3.1 billion, down from net earnings of $4.3 billion during FY 2022.
The decrease was driven by a $5.5 billion after-tax charge for opioid-related claims during the period, reports RTP.
Rite Aid, which operates 2,330 stores across 17 states, requested on November 2nd to increase the number of stores to close to 179.
Customers have reported having issues with both companies transferring their medications to other local retailers.
This is a developing story.
Other Economy News Today
A popular retailer now faces unexpected bankruptcy as the company has its FRISK score lowered to 1.
Based on past history, companies that get a 1 have between a 10% and 50% chance of filing for bankruptcy.
Popular retailer Joann is now at risk of Chapter 11 bankruptcy due to the company’s financial struggles.
“Joann is in a financial mess. Not only does it have a huge debt pile and associated interest, it is not profitable at operating level,” GlobalData Managing Director Neil Saunders posted on Retailwire.
CFO Scott Sekella, who is currently one of the company’s two interim CEOs, made the usual upbeat remarks about the company’s strategic turnaround efforts.
“In addition to stabilizing our topline, we remain focused on operating as efficiently as possible,” he said.
“With another quarter of execution of our Focus, Simplify and Grow initiative, we continue to drive operational excellence with our cost cutting initiatives leading to an over delivery on the targeted $200 million of annual cost reductions.”
“The company has only $19.1 million in cash and cash equivalents. Inventory has also dropped by 14.4% which could be the company managing it more carefully and/or Joann having to make choices based on its bank account,” reports TheStreet.
Mark Self, CEO of Vector Textiles stated the following:
“A specialty store specializing in crafts and sewing whose customer base is dwindling, no CEO and $1B in debt…sounds like liquidation time to me,” he added.
Aptos Vice President believes that Joann needs to make changes quickly and that it can look at a key rival for ideas, stating that “Joann would definitely benefit, and potentially quickly, by taking a look at their promotional strategy.”
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