Walgreens to Cut Jobs, Close Clinics in Cost Savings Move

A Walgreens store in Riviera Beach, Fla., on Oct. 25, 2017. (Joe Raedle/Getty Images)

Walgreens on Monday announced it will close 150 in-store clinics, or about 40 percent, through the end of 2019, but it will keep 200 open that are in partnership with health care providers.

The Associated Press reported on the development, saying that in August, the chain announced it was closing some 200 stores, which represents 3 percent of the firm’s 9,600 stores across the United States.

The move to cut 40 percent of the in-store clinics will save the company about $300 million from its annual costs over the next two years, the Daily Herald of Chicago reported.

Layoffs are to be expected, said a Walgreens spokesman in the Daily Herald report.

Those will be carried out as the firm modifies its “corporate support office structure to drive organizational efficiencies and reduce our cost base,” the spokesperson said, adding that employees will be eligible for severance and outplacement services.

The job cuts will not affect the store level, the spokesperson said.

Some stores are open Christmas Day: Walgreens, CVS, Rite Aid, Starbucks, 7-Eleven, and more are closed. (AP Photo/Rogelio V. Solis, File)

At its headquarters in Deerfield, Illinois, Walgreens has already laid off employees and won’t pay annual bonuses this year, The Chicago Tribune also reported. It’s not clear how many employees were laid off, another spokesman, Jim Cohn told the paper.

“We are modifying our corporate support office structure to drive organizational efficiencies and reduce our cost base, while promoting investment in truly differentiating capabilities,” Cohn said in a statement to the Tribune.

In a letter to employees on Monday, the chain said they won’t be getting an annual bonus this year.

“Walgreens and other WBA (Walgreens Boots Alliance) segments did not meet their adjusted operating income targets for 2019, and as a result, there will not be a bonus payout for bonus eligible team members this year,” said a memo sent to store managers, according to the Tribune. Alex Gourlay, Walgreens co-chief operating officer and president, signed the letter.

Walgreens also said on Monday that it also will open 100 locations for weight-loss company Jenny Craig at stores nationwide, which will begin in January 2020.

“Jenny Craig at Walgreens will give customers the opportunity to interact face-to-face with Jenny Craig consultants, just as our patients have experienced for over a century with our pharmacists,” said Jim O'Connor, Walgreens senior vice president, neighborhood health destination, in a statement.

Walgreen Co.—which bills itself as “America’s premier pharmacy”— is among many companies considering combining operations with foreign businesses to trim their tax bills. These deals, called inversions, have raised concerns among some U.S. lawmakers over the potential for lost tax revenue. (AP Photo/Charles Krupa)

The Jenny Craig at Walgreens will open in 20 states across the country in places like Phoenix, Philadelphia, Houston, and Dallas.

“As Walgreens continues to develop neighborhood health destinations, Jenny Craig is the latest addition to the broad portfolio of affordable health care services available at select Walgreens. These services include diagnostic lab-testing, primary care, urgent care, dental, and optical, to name a few,” the chain said in the news release.

According to AP, Walgreens said it raised its annual savings target to $1.8 billion by the year 2020.