So the last two layoffs, this year and 2023, CVS wouldn’t give any details about said layoffs. Except they were very quick to say that the store colleagues and distribution centers would not be affected. I wonder why they were so quick to point that out? And that said, what would it take for stores and warehouses to be included in a layoff?
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800 stores were closed between 2022 and 2024. Would not be surprised if more store closings were announced next year.
The vast majority of store and DC colleagues are hourly and relatively low pay. You need people to stock shelves, ring up customers, fill prescriptions, fill totes, drive delivery trucks, etc. CVS already runs stores and DCs on a bare-bone labor model and there isn’t much more room to cut. And labor demand hours can be flexed for hourly employees in response to changes in business. Even when stores close, there is more often than not another store nearby that can take those employees. Turnover is high, so it doesn’t take long to even out headcount.
Far more corporate employees are salaried, have degrees relevant to their respective field, and make significantly more money. Turnover is much lower as well. More of their work can be outsourced or taken over by AI. If the company decides to ki-l a program or a work stream because it’s not producing value, they can cut the people that were working on it. Salaried employees can be asked to take on additional workload, shift existing workload around, etc without paying them extra.
For the sake of simplicity, say the company is looking to save $500k in labor. They’d rather cut 3-5 corporate non-customer facing roles than 10-20+ hourly store employees.
Because the stores are already understaffed. Customers waiting extended time for their prescriptions. Customers can’t even call and speak with the pharmacy staff without leaving a voicemail.
There generally aren’t layoffs in stores or DCs because they have the ability to cut payroll without actually letting people go. This is because the majority of employees are part time hourly. They may slash payroll to where people are only working 8-12 hours per week, but they are still on the books.
Unions. Sone of the stores are union and so are some of the DCs.